The average Hamilton homeowner will get back $85 on their 2012 tax bill because of an accounting error in paperwork filed with state officials.
While the 2012 budget won’t be set until Town Meeting in May, the total amount of money collected will reflect a reduction by the amount of taxes that was overcollected in fiscal 2011.
It was an “accounting error” made by Hamilton accountants that resulted in an additional $275,000 in taxes being collected, said Town Manager Michael Lombardo. The error, on what is known as the “recap sheet,” wasn’t discovered until after the paperwork was recently finalized and submitted to state officials.
Hamilton Selectmen on Tuesday night agreed that they had no other choice than to return the money to taxpayers in 2012.
Lombardo gave the board two options, either to return it or to transfer it into the town’s reserve account.
No formal vote was taken but a majority of the board informally agreed that the money will be returned on 2012 bills. Later, Lombardo said the money would come off the 2012 tax rate, meaning it will be returned equally through all four tax bills.
Selectmen Chairman Jennifer Scuteri said Lombardo handled the situation very well - he found the error quickly, acted on it by meeting with a Department of Revenue representative and town officials and then by bringing it to the Board of Selectmen.
“I think it is important to our residents to know that is how we handled it,” she said.
When the error was discovered, Lombardo said he met with the local representative from the state Department of Revenue, along with Selectman Bill Bowler and Scuteri and Finance Director Deborah Nippes-Mena.
Without the error, the 2011 tax rate would have been 19 cents lower, meaning the tax bill for a home assessed at $440,000 – the average – would have been $85 less.
“It’s not insignificant,” Scuteri said, later adding: “I lean heavily towards ‘let’s reverse it right away.’”
Bowler said the town has been struggling to build up its reserve accounts and that the town should seriously consider "option 2" presented by Lombardo to use the money to build up its reserves. With more in reserves, the town is given a better bond rating, which in turn lowers the cost of borrowing money with a lower interest rate. That means the town saves money, he said.
Board member David Carey said he favored returning the money to taxpayers.
"I don't see any other option other than No. 1," said Selectman Jeff Stinson, referring to the first of two options outlined by Lombardo. "It is an error and it needs to be returned immidiately, or as soon as possible."
Finance Committee Chairman John McWane said the committee’s first reaction was to reverse the overcharge on the fourth quarter tax bill. But it was too late for that, he said.
Three out of four of the Finance Committee members said they wanted to “correct it as soon as you can,” McWane said.
McWane said there is a “straightforward way” to increase the town’s reserves - the stabilization fund – by making an argument to voters to increase it.
Selectman Marc Johnson said he favored returning the money to taxpayers.
“Next year let’s make that a separate case,” he said about the need to increase the town's reserve account.