Town leaders say they want to limit increases in property tax bills for homeowners.

The Select Board has told Town Manager Andrew Flanagan that the tax hike in the 2021 fiscal year, which begins in July of 2020, must be less than it was the year before.

The board approved Flanagan's long-range financial goals, and voted that his 2021 budget must bring a tax increase of no more than 3.65% for the average home's bill. The previous year's budget brought an increase of 3.8% to the average bill.

The average 10-year tax bill increase is 3.65% per year, officials said.

Select Board member Alex Vispoli suggested the tax bill cap of 3.65%. He said it would provide Flanagan a tool to help in the budget development process, which is set to begin in October.

Vispoli said setting a tax cap before budget preparations begin will force better planning by the town manager. The cap will also allow officials to avoid cutting items from the town manager's proposed budget late in the process, Vispoli said.

"I think it's important to protect the Andover taxpayer, who has seen property rates continue to rise above the rate of inflation, especially for our seniors, when social security only goes up a couple percent when it goes up," Vispoli said. "This would provide a protection, but also provide an opportunity to build that in place."

Vispoli said the average increase in tax bills has crept up over the years, noting a 4% increase in bills two years ago. He wants to see the rate reduced lower than 3.65%, adding that he initially proposed a maximum 3.24% increase.

Select Board member Christian Huntress agreed with Vispoli, noting that looking at a 10-year average allows the board to see how taxes have increased over time.

Huntress said the cap does not mean the 3.65% can never be exceeded. If extenuating circumstances are in play, the opportunity is available for the board to increase taxes.

"It starts the process at a more conservative point, which I feel more comfortable with, personally," he said.

The goal of capping the tax hike was approved by four members of the Select Board, with board member Dan Koh casting the single opposing vote. He said he is concerned over "short-term decisions" that could cost the town more money in the long term, giving examples like unfunded liabilities and sustainability.

"There's a lot that we need to do to address our preparedness for climate change," Koh said. "My concern is that if all the sudden we can't address it because it would be a 3.66% increase and we've attached ourselves to an arbitrary cap of 3.65%, all the sudden not only are we not being responsible to our planet, but we're also costing us a lot more money in the long term."

Select Board member Annie Gilbert noted her concern over unforeseen consequences that could alter the budget, such as last year's natural gas disaster and a legal judgment against the town. The town recently agreed to pay retirees a total of $500,000 following an appeals court decision that a 2016 increase in health insurance premiums may have been illegal.

"We don't have a crystal ball,'' Gilbert said. "This year we had an extraordinary disaster in the gas crisis, which created a deficit spending situation for us. We also had a legal judgment against the town that was not trivial."

Vispoli said neither the gas disaster nor the legal judgment affected taxpayers. The money from the judgment on other post employment benefits, or OPEB, was put into a trust fund account, and the deficit the town faced from the gas disaster was handled with free cash before the town was reimbursed.

Koh said he does not have an issue with a goal of not exceeding the 10-year tax hike average, but he opposes an arbitrary cap being put in place. He said he doesn't think it is the responsible thing for the board to do.

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