The Boston City Council will hold a rare emergency special meeting Friday to consider a home rule petition laying out the latest version of the mayor’s bid to raise commercial tax rates, with the clock ticking before rates are set next month.
The meeting will be held virtually at 9:30 a.m., for the sole purpose of considering and likely referring the legislation to a Council committee. Mayor Michelle Wu told reporters Thursday that would allow for a hearing early next week and potentially a vote at the regular City Council meeting next Wednesday.
“We were hoping to have a hearing next week and vote next Wednesday,” Wu said after an unrelated event in Dorchester. “Fingers crossed — we want to make sure that everyone’s questions are answered and everyone has a chance to vet the latest proposals and terms, but that will keep us right on time.”
Wu has stated the Legislature, which would take up the bill if it is passed by the City Council, would need to act by late November, to allow the city to make its deadlines for setting tax rates and securing the necessary Council approval by late next month, and sending out third-quarter tax bills in January.
The new petition is the result of a deal struck this week between Mayor Michelle Wu and business leaders who withdrew their long-standing opposition to the plan — contingent upon a lower shift of the city’s tax burden on to commercial properties, beyond what is allowed by state law, in the latest proposal.
It seeks to fend off a 14% annual increase in property taxes for the average single-family homeowner, and a 27.8% quarterly increase in January. City data shows the annual increase would dip to roughly 9% with the maximum shift included in the compromise legislation, and the quarterly spike, per an involved business stakeholder, would be about 18%.
The compromise plan would implement a higher shift of the tax burden onto businesses for a three-year period. The 181.5% maximum shift in the first year was proposed by the business leaders, while the numbers in the remaining two years, 180% and 178%, were put forward by the mayor. The shift would return to the 175% state limit in the fourth year, fiscal year 2028.
It also targets $45 million in tax relief over the three-year period to small businesses to offset the potential impacts of the commercial tax rate increase, and triples the personal property tax exemption threshold for small businesses, from $10,000 to $30,000 — features included in a prior compromise with the House.
City Council President Ruthzee Louijeune called for the meeting Wednesday, after Councilor Ed Flynn blocked a vote to add the mayor’s late-file petition to the agenda, leading to gasps and cries of “shame on you” from members of the public, and a warning issued by Louijeune that there was no speaking in the chamber.
Louijeune called the emergency special meeting, per a letter she sent to the city clerk, “to prevent further delay and address urgent tax matters being taken up at the city and with the state.”
Flynn, a critic of the plan who has proposed two alternatives, told the Herald that his “nay” vote, which prevented the unanimous consent necessary, per Council rules, to add a late-file matter to the day’s agenda, was about ensuring transparency in the process.
“Given how this legislation has been negotiated — behind closed doors, outside of the view of the residents, and the City Council — it’s critical that we adhere to the transparency and accountability that the taxpayers of Boston deserve,” Flynn said in a Wednesday statement.
“This proposed legislation should follow the proper procedures, and not bypass our Council rules to fast track a bill to raise the tax rate on businesses beyond the state limit. The city neglected to compromise in good faith for months on cuts to our 8% budget increase, implementing a hiring freeze, or considering our revenue and alternatives from fiscal watchdogs,” Flynn added.
A prior version of the mayor’s tax bill, with a higher maximum tax shift onto businesses that drew criticism for being proposed at a time when commercial property values are plummeting and office building vacancies remain an issue, was approved by the City Council and House of Representatives, but stalled in the Senate by the end of formal legislative sessions in late July.
Negotiations resumed privately between the mayor, Senate President Karen Spilka, Boston senators and the business stakeholders involved in this week’s deal late last month, and carried out into the public realm for the first time this past weekend, when the terms of a potential deal were shared by Wu and the business groups — indicating the first signs of a thaw after months of frosty relations.
The resulting deal with the heads of the Greater Boston Chamber of Commerce, Boston Municipal Research Bureau, Massachusetts Taxpayers Foundation, and NAIOP Massachusetts was announced by the mayor’s office on Wednesday.