School Project Cost Information

New School Project Costs

This analysis of the school project costs and tax impacts is based on the cost estimate presented to the Select Board at its July 23, 2024 meeting (link to meeting video).

Total Project Budget estimate: $173,439,000

In order to provide an estimate on the tax impact of this project, the Town used the following assumptions:

Cost: $173,439,000
Bond term: 30 years
Interest rate: 4.25%

Estimated typical annual debt service amount: $9,967,000.

Fiscal Year 2024 Property Tax Information

Residential Tax Rate: $10.92
Commercial - Industrial - Personal Property (CIP) Tax Rate: $17.94

New School Tax Impact Information

Note: interest rates are subject to change due to the Town's bond rating, macroeconomic conditions outside of the Town's control, and investor interest in the Town's bonds. The Town is currently rated AAA by S&P; the latest ratings report from August 2023 is available online (PDF). The Town is estimating a 4.25% interest rate based on a forecast provided by the Town's financial advisor.

How Does Milton Compare?

The chart below provides data for average single family tax bills as of Fiscal Year 2024 (not including additional costs for a new school) for some communities that the Town has historically compared itself to and communities that are located nearby Milton.

The state's Division of Local Services posts significant information regarding property value and tax data on their Municipal Databank site: https://www.mass.gov/info-details/division-of-local-services-municipal-databank

Additional Information

Municipal Bonds

Major capital projects, such as new facilities, are typically funded by cities and towns by issuing debt. These municipal bonds are then paid over a number of years, depending on the anticipated useful life of the asset. In the case of municipal facilities which are expected to last at least 50 years, cities and towns are allowed under Massachusetts General Law to pay the cost of the bonds for a maximum of 30 years.

Proposition 2 1/2

Proposition 2 1/2 limits the amount of property taxes a city or town may assess on real and personal property. In order to fund the debt service related with major capital projects, a city or town may ask its residents to "exclude" the debt service on a capital project from the limitations imposed by Proposition 2 1/2.

If a debt exclusion is approved for the new school project, it will allow the Town to levy additional taxes in order to pay the debt service costs of the school project. Once the bonds are fully paid off, the Town can no longer levy these additional taxes.

Previous examples of approved debt exclusions include: the 2000s school projects, the Library project, and the reconstruction of the three Milton fire stations.

Approval Process

Several votes are required before any debt exclusion is approved:

Voters must approve the ballot question (majority approval required).
- The Select Board must vote to place a ballot question on an election ballot.
Town Meeting must vote to appropriate funds for the project (2/3 approval required)