City of Methuen Master Plan

Fiscal Analysis
Table 33: Comparison of Average Non-Residential Tax Bill with Municipal Service Costs
Average Average Average Tax
Municipal Service Costs [1]
Type
Assessment Building SF Bill (FY-2005) Low Medium High
Retail $985,779 10,664 $18,059 $3,669 $4,610 $5,215
Office $751,653 9,423 $13,770 $3,242 $4,073 $4,609
Industrial $1,287,627 31,638 $23,589 $10,886 $13,677 $15,473
Average Average # of Average Tax
Municipal Service Costs [3]
Type
Assessment Employees [2] Bill (FY-2005) Low Medium High
Retail $985,779 21 $18,059 $3,958 $4,972 $5,625
Office $751,653 47 $13,770 $8,743 $10,984 $12,427
Industrial $1,287,627 40 $23,589 $7,339 $9,220 $10,431
[1] Factored at $0.34/SF (low); $0.43 (medium); and $0.49 (high)
[2] One employee per 500 SF (retail); 200 SF (office); 800 SF (industrial)
[3] Factored at $186/employee (low); $233 (medium); and $264 (high)
SUMMARY OF FINDINGS
The following points summarize the relevant fiscal findings:
• Methuen had a total revenue base of $100.6 million in fiscal year (FY) 2005 representing an
increase of $48.5 million (93%) since FY 2000. Property taxes ($52.1 million or 52%) and
State revenues ($39.2 million or 39%) represented the largest components of the City’s
revenue stream in FY 2005;
• The City of Methuen had expenditures of $97.6 million in fiscal year (FY) 2005 representing
an increase of $30.3 million (45%) since FY 2000. Education ($50 million) comprised over
half of the City’s budget in FY 2005 with fixed costs ($11.5 million) being the second largest
component of the budget at about 12%;
• In most cases, the amount of property tax revenue generated from single family and multifamily
residential dwellings does not cover the municipal costs to service the residents within
those units. For single family units, this gap between the property tax generated and the cost
to service the units may be up to $6,500 per unit;
• In all cases, the amount of property tax revenue generated from non-residential (retail,
office, and industrial) development, exceeds the municipal cost to service those properties.
Depending on the type of property, the financial surplus ranges from $1,300 to $16,000 per
property.
• As Methuen’s tax base has become more and more reliant on residential properties, it is
critical that land use decisions be made on a sustainable framework – that being on social,
environmental, fiscal and economic factors. From a fiscal perspective, it is critical that the
City move away from being heavily reliant on residential properties and therefore understand
how potential future land use decisions impact the City’s fiscal health.
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