Hanover Select Board Maintains Commercial Tax Rate at 1.15 Split After Business Owners Voice Concerns
HANOVER - November 17 - In a 4-1 vote, the Hanover Select Board decided to maintain the commercial-to-residential property tax split at its current rate of 1.15, rejecting a recommendation from the Board of Assessors to lower it to 1.10. The decision came after numerous local business owners testified about the strain from last year’s tax increase and requested stability in the face of economic uncertainty.
The Full Story
The tax classification hearing drew significant public participation, with business owners and community stakeholders making impassioned pleas for the board to either maintain or lower the commercial tax rate. Director of Assessing Elaine Boidi presented the options, explaining that Hanover’s total levy for fiscal year 2026 is $59,127,243. The town’s property values break down to 84.95% residential and 15.05% commercial, industrial and personal property combined.
Boidi and Board of Assessors Chair Les Molyneaux recommended a residential factor of 0.9823, equivalent to a 1.10 shift, which would have slightly lowered the commercial tax burden from the current 1.15 rate. Molyneaux emphasized that “the single tax rate is the most fair and equitable rate,” but acknowledged the board’s tradition of using a split rate. He cited industry standards suggesting communities should have at least 20-30% commercial property values before implementing a split rate, while Hanover sits at approximately 15%.
Business testimony painted a stark picture of the local commercial landscape. Frank Giglio, owner of Merchant’s Row shopping center, warned that Hanover risks losing significant tenants to neighboring communities with more favorable tax rates. “You’re about to lose some big tenants in this town,” Giglio stated. “Some you don’t even know about, I do because I’m in the business. You’re losing one real big one that you’re going to be very sorry about, and they’re going next door.”
Giglio provided specific examples of the competitive disadvantage, noting that Hingham is actively soliciting businesses with promotional materials advertising a flat rate of $10.69 per thousand and guaranteed permits in six months. He explained that his operating costs in Hingham are actually lower despite higher rents, making Hanover less attractive to potential tenants.
Ed Callahan, general manager of Hanover Crossing, reinforced these concerns by highlighting that Hanover is “the only community in our immediate region that still has a split tax rate.” He noted that online sales have doubled from 20% to 40% of retail sales since the pandemic, creating additional pressure on brick-and-mortar businesses. Callahan also pointed out unique costs at Hanover Crossing, including operating their own wastewater treatment facility due to the lack of public sewer in Hanover, and maintaining a private contract with Hanover police for security services.
Erin Richardson, speaking as President of the Hanover Chamber of Commerce, noted that a recent grant program revealed many small businesses are “struggling and rely heavily on local support programs to remain viable.” She emphasized that most of Hanover’s commercial base consists of small, locally-owned businesses rather than large national retailers, and that increasing their tax burden would make it “even more difficult for them to invest in their operations.”
Select Board member Vanessa O’Connor acknowledged her previous support for a higher split rate but expressed willingness to compromise. “I do think that we are a community that needs to work together,” O’Connor stated. “While I still have my own personal belief somewhere the split tax rate should lie, I do think it is a reasonable request to take a pause, catch our breath, understand the real impacts of this.” She ultimately voted to maintain the current 1.15 rate.
Select Board member Greg Satterwhite noted he was struck by the fact that almost every business correspondence received simply asked to leave the rate where it is rather than requesting a reduction. “Is it a fear that we’re going to go higher than 1.15” he asked business owners, who confirmed this was indeed their concern. Satterwhite expressed support for maintaining the current rate and called for better partnership between the town and local businesses.
Select Board member Steve Louko agreed, stating that “businesses want that predictability, and we should provide it.” He suggested the tax rate should remain steady for “a number of years, maybe even five years” before being reevaluated, rather than making annual adjustments that create uncertainty.
Board Chair Rhonda Nyman supported lowering the rate to 1.10 as recommended by the Board of Assessors. “Businesses don’t tax our system like they don’t have children that go to school” and expressing appreciation for business owner testimony.
The practical impact of the decision: at the maintained 1.15 split rate, the average single-family home assessed at $813,883 will have a tax bill of $10,149, while the average commercial property assessed at $1,603,347 will have a tax bill of $23,617. If the board had adopted the recommended 1.10 rate, residential taxes would have increased by approximately $100 per average home, while commercial properties would have seen savings of approximately $1,000.
Rachel Hughes explained that Hanover has maintained a split rate since 2003, and that while 113 of Massachusetts’ 351 communities use split rates, approximately 70% of those split at the maximum allowed rate of 1.75. “Hanover has never done that,” Hughes noted. “We don’t do that. And none of us have ever sat up here and said that we would. Instead, we take a thoughtful approach to what we need in our community.”
The board also unanimously rejected classifying open space separately, adopting a small commercial exemption, or implementing a residential exemption, following the Board of Assessors’ recommendations on all three items. Boidi explained that the small commercial exemption, used by only 14 communities statewide, is “very, very difficult to track and time consuming” and often doesn’t provide benefits to the intended recipients since property owners rather than business tenants receive any tax reduction.
The meeting also addressed the MBTA Communities Act zoning requirement. Planning Board Chair MaryAnn Brugnoli reported that her board voted 5-2 to recommend approval of the MBTA zoning overlay district at the upcoming special town meeting. The planning board selected the Hanover Crossing area as the designated zone, which would allow for higher-density residential development by right, though no specific projects are currently proposed.
Brugnoli acknowledged that “no one is thrilled with the idea” but emphasized the risk of losing local control if the town fails to comply with the state mandate. She noted the recent emergence of the “special master” enforcement mechanism, revealed when Hanson held its town meeting, has changed the calculation for many communities. Town Manager Joe Colangelo explained this is “a zoning exercise, not a building exercise,” and that any future development would still need to go through site plan review and meet requirements including water capacity studies.
Select board members indicated they plan to provide commentary supporting the MBTA zoning articles at the December 8 special town meeting. “I think there’s been a shift here for a lot of residents after learning a bit more about kind of what happens if you don’t pass it,” O’Connor observed. “I think it’s really important to explain to residents why that shift has occurred.”
Louko raised concerns about the town’s water capacity constraints, noting that Public Works Director Victor Diniak had stated at a previous meeting that developments could be denied if the town couldn’t supply sufficient water. Colangelo pointed to language in the proposed bylaw requiring utility capacity studies and stating that if the town cannot provide sufficient water, “it would be up to the private developer to find a way to supply the project.”
Budget Director Jim Hoyes provided an update on fiscal year 2027 budget planning, outlining eight key priorities that will guide Town Manager Colangelo’s budget submission in February. These include maintaining alignment with select board financial policy goals, not proposing an operational override for fiscal years 2027-2031, moderating the property tax burden by spreading excess levy capacity over three to five years, and setting department growth rates at 2.25% for municipal departments and 2.75% for Hanover Public Schools.
Hoyes noted positive developments including new growth coming in $135,000 above projections and overall tax projections hitting 99.5% accuracy. However, he cautioned about ongoing constraints including limited new growth opportunities, continued budgetary impact of fixed costs, and leaving only approximately $400,000 to fund any growth across all town departments after accounting for required cost increases.
The board also received the fiscal year 2024 audit presentation from Scott McIntyre of CBIZ. McIntyre reported an unmodified “clean” opinion on the town’s financial statements, with the general fund’s unassigned fund balance increasing from $8.5 million to $9.2 million, representing approximately 13% of expenditures. He noted the water enterprise fund showed a minor $38,000 deficit in covering operations and debt service, something he recommended watching going forward.
The audit revealed the town’s long-term liabilities include a net pension liability of $38.3 million (with Plymouth County retirement at 64% funded) and a net OPEB liability of $30.3 million (with Hanover’s trust approximately 20% funded using a 6.6% discount rate). Town Accountant Debbie Dunn was praised for completing the audit despite staffing turnover in the accounting department.
Why It Matters
The decision to maintain the 1.15 commercial tax split rate represents a compromise between providing relief to businesses and protecting residential taxpayers from additional burden. For the average homeowner, maintaining the split saves approximately $277 compared to a single tax rate, while the average commercial property owner pays approximately $3,078 more than they would under a single rate. The stability provided by maintaining last year’s rate may help retain existing businesses and signal predictability to potential new commercial development, though concerns remain about Hanover’s competitiveness with neighboring communities that use single tax rates. The split rate also continues Hanover’s two-decade practice of shifting some tax burden to commercial properties, though at a far more moderate level than the maximum 1.75 rate used by many other Massachusetts communities. Business owners will need to monitor whether this decision, combined with broader economic pressures, affects commercial property values and lease rates in the coming year.
Meeting Minutes
Key Motions & Votes
Motion: Adopt residential factor of 1.15 (equivalent to 0.9734) for fiscal year 2026, reject open space discount, reject small commercial exemption, and reject residential exemption. Outcome: Approved. Vote: 4-1 (Nyman opposed). (Timestamp: 1:39:39)
Motion: Continue the tax classification hearing until notified by Department of Revenue of certification. Outcome: Approved. Vote: Unanimous. (Timestamp: 1:43:07)
Public Comment
Extensive public comment focused on the commercial tax rate. Business owners testified about financial pressures, competition from neighboring towns with lower rates, and the importance of tax rate stability. No public comment was offered on other agenda items.
What’s Next
The Special Town Meeting is scheduled for December 8, 2025, and will include articles on MBTA Communities Act zoning, capital project appropriations, and a citizens petition regarding the town administrator form of government. The select board will consider providing formal commentary on articles at their December 1 meeting. The Town Manager’s fiscal year 2027 budget will be submitted in early February 2026. The Board of Assessors will await Department of Revenue certification to finalize the tax rate. Plymouth County Retirement System Treasurer Tom O’Brien is scheduled to present to the board on December 15 regarding retirement system funding. The fiscal year 2025 audit is currently underway and may be presented to the board in the coming months.