AGAWAM – Property tax rates are dropping next year, but homeowners will see higher tax bills as property values rise, following a City Council vote on Dec. 6.

Councilors voted 10-0 to adopt Mayor William Sapelli’s proposed tax factor shift, which determines the difference between the rates for residential and commercial properties. The council shifted more of the tax burden onto the commercial side, adopting a shift factor of 1.58 in fiscal 2022. The current tax shift is 1.55.

Both the residential and commercial tax rates will be reduced, even though the amount of money to be collected is increasing. Residential rates will drop from $16.80 per $1,000 assessed value in fiscal 2021 to $16.11 in fiscal 2022. Commercial rates will dip from $31.46 to $30.58.

Because of changes in property values, however, the owner of an average single-family home, valued at $249,624 in fiscal 2021 and $275,456 in fiscal 2022, will see an increase in property taxes of about $61 per quarter, and the owner of the average condominium unit will pay about $25 more per quarter. For commercial properties, which saw less appreciation in value during the past year, most taxpayers will actually see their bills reduced.

The difference is that single-family homes in Agawam increased an average of 10.3 percent in value in the past year, two-family properties were up 11.1 percent, and condominium units up 8.6 percent, while the average commercial property only increased 1.1 percent.

“When the value of your property goes up that much, it’s kind of a good thing, because that’s your most important asset,” Sapelli told the council. “But it’s not a good thing when your tax is now based on that 10 percent increase, because now you have to pay more taxes because of the assessed values.”

He continued, “It’s always a tough balance to weigh the percentages that you place on each one, and one thing that I’ve been cognizant of in my four years … is that we don’t want to make that gap grow too large and put too much on the commercial side.”

The commercial rate is almost twice as high as the residential rate. Sapelli said he’s been paying close attention to this and trying not to make it grow any larger. Raising the commercial rate could encourage businesses to leave Agawam, he said, or not to move into town in the first place. Losing commercial taxpayers would push more of the tax burden onto homeowners.

Sapelli also recognized that many Agawam businesses suffered significant losses in revenue during the COVID-19 state of emergency, such as Six Flags New England and local restaurants and bars, which were forced to close for a period of time.

Town Assessor Carolyn Reed said assessed values were based on real estate sales data from calendar year 2020, using state Department of Revenue guidelines. Following the large increase in home prices that year, residential properties now account for 77.58 percent of all assessed property value in town, rather than 76 percent the previous year.

“Due to the unique market dynamics on the residential side, we did see that the residential class picked up about 1.5 percent increase over the prior year, of the entire town valuation,” Reed said.

Reed called the tax shift of 1.58 a “win-win” for both residential and commercial taxpayers. It reduces tax bills for commercial properties but also provides less of an increase for residential taxpayers than they would have paid if the split had remained at 1.55.

The council’s vote on Dec. 6 was to determine how the tax burden would be apportioned between residential and commercial properties. Tax bills are increasing because of growth in the town budget, which was voted in June. Reed said the budget called for a tax levy of $67.22 million to be collected locally, an increase of more than 2.5 percent from the previous fiscal year.

Sapelli said Agawam is one of six cities in the Springfield region with a split tax rate. Although the residential tax rate in Agawam is the lowest in that group, relatively high home values mean that the average tax bill fell in the middle. Nearby cities with split tax rates include Chicopee, Holyoke, Springfield, West Springfield and Westfield.

New treasurer

Also at the Dec. 6 meeting, Sapelli introduced Agawam’s new treasurer-collector, Melissa Zawadzki, who has been serving in this role for about two months.

Sapelli said she has “hit the ground running,” and came to Agawam with a great deal of experience as a treasurer in other communities. She said she’s worked in municipal finance since 2004, as treasurer-collector or finance director.

The councilors welcomed Zawadzki to Agawam and wished her luck with her new position.

Senior van donated

City Council President Christopher Johnson said the Pioneer Valley Transportation Authority is giving the town a used van for use by the Agawam Senior Center. He said the van has a little over 100,000 miles on it, but remains in good condition and up to date on its scheduled maintenance. He said that during the pandemic, the number of rides provided by the Senior Center increased.

“This will assist the Senior Center in providing rides to those seniors who need it,” Johnson said.

With a vote of 10 yes, one absent, the van was approved by the City Council.

The next City Council meeting is scheduled for Dec. 20.