New tax formula could save each Medford homeowner $122

Posted: March 03, 2013

Meeting in special session Saturday, Medford's town council informally approved a new formula for estimating unpaid taxes that could mean little or no tax increase this year.

State statute obliges muncipalities to annually estimate the amount of taxes they will not be able to collect in the year ahead, and to include a "reserve for uncollected taxes" in their budget calculations.

Mayor Frank Czekay told council that Medford last year collected only 97.18 percent of its taxes, and that under its standard estimation formula it would need to create a reserve this year of $2.4 million.

But Czekay, a lawyer and certified public accountant, informed his colleagues that he last week discovered the state allows two other formulas, and that one of these could cut $1.1 million from the amount of taxes the town needed to raise this year.

"If these numbers hold," he said, "we should be able to go to zero" with the tax rate. All the other council members said they approved the new formula provided that township solicitor and auditor deemed it proper.

Township manager Christopher Schultz had projected a 3.7 cent increase in the 2013 tax rate, which would have cost the average homeowner $122.

Under the formula Czekay has recommended, the town can project collecting 98.38 percent of taxes this year.

Czekay said he thought the new number was a realistic figure because there were likely to be fewer appeals of property tax assessments this year. Last year's townwide revaluation had prompted an unusually large number of appeals, he said.

He also said the town's tax collector was "very aggressive" in pursuing unpaid taxes.

Czekay said he had discussed using a different estimation formula with the town's auditor, Kevin Frenia, and that Frenia had told him it appeared legal and appropriate based on his preliminary review.

He said Frenia, who did not attend Saturday's special budget session, would further review formula options and make a final recommendation to council at its regular meeting Tuesday. Council could formally adopt the new formula at that time.

Contact staff writer David O'Reilly at 856-779-3841 or or @doreillyinq on Twitter.

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