Town Finances: Debt Picture – Capital Projects Put Additional Pressure On Residential Tax Bills

There are two ways that your annual property tax bill can be impacted.  The first is through an increase in the general tax levy.  State law keeps that always below 2.5% of last year’s budget, unless the town’s voters approve an override.  The other way is through what is called “excluded debt”.  What is that ? The town can enter into a debt commitment in two ways. The first is through “non excluded” debt, which means that debt payments are contained within the town’s operating budget and are paid out the town’s general fund, so there is no impact to your residential tax bill.  The second is through “excluded debt” which occurs, when the town meeting authorizes the town to take on a debt commitment outside of the town’s operating budget.  When this occurs, the bill for that debt is assessed on each taxpayer and is tacked on to their annual tax bill.   It is important to note, that while a vote at town meeting to approve “excluded debt” can increase your tax bill; unlike a proposition 2 ½ override, tax payments end once the debt is paid off.  An override is a permanent increase in the annual tax bill.  However, while there may seem to be a distinction, if debt payments are high and are extended over a long period of time, the tax impact is essentially the same as an override.

  The town of Westford has made some significant debt commitments in recent years.  The full impact of these payments has until now been deferred.   In 2022 the Westford Town meeting voted to exclude debt to support JV Fletcher Library renovations and expansion and for the roof at the Blanchard Middle School. Up until this year, pain to taxpayers from these projects was fairly light, because under the terms of the debt, the town was paying only the interest on these projects.  This year taxpayers will feel a greater bite because payments on both the principal and interest will kick in.   Homeowners will see their property tax bills for these projects jump to $243.00 for a home valued at 852K in FY26. Understand, these assessments are tacked on to your annual tax payment. In FY27 the debt assessment will increase to $280.00 and then will dip slightly to $277.39 in FY28.

                 It is very important to understand the impact on the tax bill, when town meeting approves an “excluded debt” measure. There are currently two pending capital projects for which approvals for excluded debt may be sought.  The first is related to a proposal to repair the Westford Academy roof. The second involves potential renovations to the Robinson school. Based on current estimates for both of these projects, if the town were to approve both debt commitments, which are expected in FY 29, the impact could drive up the tax bill on an 852K home to $665.15 in FY29, and then to a high of $921.00 in FY31. Remember, these figures are over and above your regular tax bill.   This is why it is very important to attend town meeting.