Ask the Assessor

Why isn’t the new tax rate calculated until late November, when it’s almost half-way through the fiscal year?

The timetable to prepare and submit various financial documents to the Massachusetts Department of Revenue (DOR) dictates when the tax rate gets calculated and certified by the DOR.

Here’s a broad overview of how things go:

• June: The old fiscal (financial) year ends on June 30th.
• July: A new fiscal year (now Fiscal Year 2025) begins on July 1st.
• July: The Town Accountant needs to close out the financial “books” for the previous fiscal year as well as create new financial records for the new fiscal year.
• July onward: Part of closing the books includes calculating whether there is any “free cash” left over.  “Free cash” is a municipal financial term encompassing two main things: First, did the town spend less money than was budgeted for?  Second, did “local receipts” (application fees, permit fees, auto excise taxes, etc.) exceed the amount they were forecast to be?  The DOR typically certifies free cash in the late Summer or early Fall.  This amount is important in determining what amount of funds can be allocated at the Fall Town Meeting.
• July onward: The Assessing staff has until June 30th to capture any “new growth” – which is any property (primarily, new construction) not previously valued since the previous July 1st.  Once calculated, the amount of assessed value is multiplied by the previous fiscal year’s tax rate – with the result equaling dollars the town can spend above its Proposition 2 ½ tax cap restrictions.  The DOR typically approves the new growth calculations in the September/October timeframe.
• July/August: The state legislature and governor finalize the new fiscal’s year’s budget, which includes the amount of state aid that Holliston will be receiving.  This amount reduces the amount of money the town has to raise through property taxes.  The legislature is supposed to finalize the state’s new budget by June 30, but – over the past several years – it hasn’t sent it to the governor until late July or even August.
• July/August/September: The Assessing staff has to make sure that all property sales from the appropriate time period set by the DOR (for Fiscal Year 2025, it is from July 1, 2022 through December 31, 2023) are analyzed to see what trends were going on then.  These trends must conform to ratio standards set by the DOR, and are then extrapolated to all properties within the town (hence the term, “mass appraisal”).  The DOR approves the sales trends being used (in September or October).
• July/August/September: The Assessing staff also calculates commercial, industrial and personal property values.  These and he residential values will be reviewed and approved by the elected Board of Assessors before being sent to the DOR in September or October for its approval.
• October: The Fall Town Meeting is held.  If any money is “raised and appropriated” (through property taxes), this has to be known as part of the tax rate-setting process.
• October/November: All town financial departments finalize the numerous forms that are sent to the DOR for its approval.  Once the Select Board holds its annual Tax Classification public hearing, the final two forms are sent to the DOR for approval. The DOR typically certifies (approves) the tax rate within two or three business days.
• Final votes from the Classification Hearing and all financial data related to the tax rate are submitted to the DOR in November for approval. 
• Next, all relevant property valuation data is programmed into the town’s MUNIS financial software in order to generate the “actual” tax bills for the final two quarters of the fiscal year.  These bills are printed and mailed to property owners in late December.