Boston City Council passed a new measure to increase commercial property taxes last week after Mayor Michelle Wu reached a compromise with local businesses that continues to receive praise and backlash.
The mayor came to an agreement with local business leaders that allows the city to temporarily increase the commercial property tax rate beyond state limits. The measure is part of an effort to shift more of the city’s property tax burden onto businesses while avoiding large tax hikes for homeowners or cuts to city spending.
Boston City Council held a procedural vote on a late file from Wu’s office on Oct. 25 to implement the increase in commercial tax rates. Councilor Ed Flynn voted against the measure, prolonging its deliberation since late files must receive unanimous votes to pass.
At a subsequent hearing on Oct. 30, which only required a majority vote, the council passed the measure in a 12-1 vote. Flynn was the sole vote against the measure.
Wu wrote in a statement to The Daily Free Press that the Mayor’s Office is “grateful” to the council “for acting with urgency to advance this amended residential tax relief proposal.”
“Following town hall meetings with residents and months of discussions with legislators and stakeholders, this common sense consensus legislation will stabilize both the residential and commercial sectors and protect homeowners and renters from a spike in taxes,” Wu wrote. “I look forward to continuing to work with the Legislature as it moves through the State House.”
Following the passage, Flynn voiced concern in a statement about the impact of the measure on relationships between the city, local businesses and leaders given the time it took to come to an agreement.
“It did not have to be this messy in pitting residents against businesses, or public disagreements with the Senate and business community,” Flynn wrote. “We should have listened to fiscal watchdogs and experts to compromise months ago.”
Flynn wrote he believes “the City of Boston faces long-term fiscal issues.” He wrote the city’s budget is over 70% reliant on property taxes, and 50% of land is absorbed by nonprofit partners in the Payment In Lieu Of Tax program and is nontaxable.
“That is an unsustainable formula in my opinion,” Flynn wrote.
The Massachusetts Senior Action Council, which represents the interests of senior citizens, advocated for the measure.
“For many who are homeowners, this proposal will help lessen the property tax increase,” said Carolyn Villers, executive director and community organizer of MSAC. “Most were facing 28% tax increase in January, and this home rule petition will help reduce that if we can have it passed through the legislature as well.”
Tamara Small, CEO of NAIOP Massachusetts, a commercial real estate development organization, called the measure “a meaningful compromise” in an email to The Daily Free Press, though she wrote she does not think it is “a solution to the complicated public financing challenges facing the city of Boston.”
“Looking ahead, we must acknowledge the crisis facing commercial real estate,” Small wrote. “To ensure a vibrant and healthy future, the City must work closely with commercial property owners and developers to expedite economic growth and development in Boston.”
Kelly McGrath, executive director of Brighton Main Streets, a neighborhood organization that supports small businesses, said her worry with increasing commercial property taxes is “they’re going to then put it on the backs of the small businesses.”
McGrath said she would rather see the city “creating more vibrancy and revitalization of commerce” or any ways to “make cuts in the budget.”
“You need to use all the tools in the toolbox,” McGrath said.
