The financial impact of a proposed development can now be calculated by all with the following formula. Default data are numbers that currently apply for Charlestown. You can change the numbers shown in the box to indicate any other conditions of interest. (the calculator may not work in all browsers*)
T = Charlestown Tax Rate
A = Average assessed value of houses in the subdivision in thousands of dollars
S = Average number of public school students per dwelling unit
C = Tuition cost per student in dollars
M = Municipal costs per dwelling unit in dollars
H = Number of houses in the subdivision
You can use the default values, or enter your own numbers in the text boxes below. The values of A (house value) and H (number of houses) will change for each subdivision. S (average number of students per house) will change in different areas of town. Do not use commas in numbers and type carefully. If you have trouble, reload the page and start over. The page will recalculate the impact of development as you enter new numbers.
The result above is in dollars.
The education and municipal costs of the subdivision are subtracted from the taxes paid by the subdivision. A positive number shows a net financial gain to the town from this new development. A negative result has a small minus sign that looks like “-” in front of the number. The minus sign may be hard to see. If the result is a negative number, this is the net yearly cost to the town.
What are our assumptions?
Charlestown’s Total Costs
Charlestown’s total budget is made up of municipal spending on things like road maintenance, police, and other employees, and payments to the Chariho regional school system. The municipal budget is impacted by all houses. The Chariho payment is based on the number of students and is a tuition payment per student.
Charlestown’s total budget for 2011-2012 is $25,604,847.00
The total municipal budget for 2011-2012 = $11,333,985.00 (this does not include the money Charlestown pays to Chariho which is currently about $15 million)
There are a total of 6,136 dwelling units in Charlestown
Municipal cost = (municipal budget)/6,136 = $1,847.00 per dwelling unit
(we are open to other methods to calculate municipal cost, if you think you have a more accurate estimate, please let us know)
Education cost = $15,231 tuition per student – $1000 in state aid = $14,231 (but state aid is declining)
We’ve set a value of 0.59 students per dwelling unit as that is the number provided by school bus companies for the northern part of town where land is available for new development. In other areas of town this number will be lower. If your neighborhood has 10 houses and three public school students, then the number of students per dwelling unit is 0.3
Total Cost per House
((average number of schoolchildren per house) x (tuition for one child))+(municipal costs per house)
Total Revenues per Dwelling Unit
total revenues per dwelling unit = (assessment in thousands) x tax rate
Net gain or loss to the town = total revenues – total costs
Summer and retirement homes often generate more revenue from property taxes than the costs they incur for municipal services, whereas the obverse is generally the case for homes occupied by families in year-round developments. Costs for education account for a significant portion of this difference, and it is the balancing of these differences that determines the tax rate. Resident input into the Comprehensive Plan serves to guide which options the town is favored to follow.
Charlestown’s current tax rate is $9.06 per each thousand dollars of assessed value. The formula above allows the reader to calculate the financial impact of a proposed development on the town and, whether positive or negative, to calculate the change in tax rate that would neutralize that financial impact. There are many facets of development to consider, and it is ultimately up to residents of the town to decide, through modification of their Comprehensive Plan, whether the potential benefits of a proposed development justify the financial impact on the community.
Calculate Tax Impact
You can now use your results above in our Tax Impact Calculator to determine how this spending or revenue will impact the tax rate.
*Browser compatibility – we’ve had reports that our calculator does not work in some versions of Safari. It does work in Firefox, IE, and Chrome.