With Mayor Michelle Wu’s increasingly quixotic attempt to raise commercial taxes set to come before the Senate for a third time again Monday, the Joint Revenue Committee chair weighed in on the issue with cold feet on Sunday.
“It has been so important to really kick the tires on this,” said committee chair Sen. Susan Moran in a statement Sunday. “The effects can potentially reverberate throughout the state, so the process needs to be collaborative. The Governor is working on many great initiatives across Massachusetts and a hard left turn in Boston reworking property taxes may have serious effects for what we are trying to do statewide.”
State Senate President Karen Spilka’s office said the branch is “is expected to take up Boston’s commercial property tax proposal, along with several local matters” on Monday.
This will be the third time the legislation has come before the Senate, having been blocked by Boston Sen. Nick Collins twice last week. The bill has previously cleared the House, after being delayed multiple times in the chamber over the fall.
The home rule petition, championed by Mayor Michelle Wu, would shift more tax burden onto commercial and business sectors and off of homeowners.
The bill’s third appearance before the Senate comes after the Wu sent a letter to legislators last Thursday detailing new city data showing homeowners are at risk of a smaller tax increase than the city previously estimated when the bill was written.
“The original bill was based on the Mayor’s projection of a 33% residential tax increase without the bill, which was updated to a more modest 14% increase and the actual numbers just came out at about 10.5%,” Moran wrote.
The most recent estimate of a 10.5% jump in residential taxes is closer to the average yearly increase of about 9%. Under the bill, Wu’s letter stated, would now lower the residential tax increase to about 5%.
The Boston Municipal Research Bureau, Greater Boston Chamber of Commerce, NAIOP and the Massachusetts Taxpayers Foundation, who previously reached a compromise with the mayor to support the bill, released a statement Thursday expressing new skepticism for the proposal.
The 10.5% residential tax increase should the bill fail, the groups’ statement said, would be “in line” with previous increases over the last five years and “ensure stability for the commercial real estate industry during this challenging time.”
The Small Property Owners Association spoke out Sunday, asking for answers in light of the new data including what Wu knew about the data and when.
“While we thank the officials who have asked for a pause in considering the mayor’s tax shift plan, we demand answers to some key questions,” said Amir Shahsavari, Vice President of the SPOA. … “Why did (Mayor Wu) make demands and push negotiations to hike taxes on our most vulnerable sector, the business community, as well as Boston residents, to avoid a crisis that didn’t exist?”
Greg Vasil, CEO of the Greater Boston Real Estate Board, said with the situation was “not as dire as originally predicted,” and added that the home rule petition may no longer be a “necessity.”
Moran echoed concerns in her statement Sunday without taking a position on the bill. She noted there was a “general lack of outreach on the bill” from the Mayor before her letter Thursday.
“Some legislators had concerns that it would have been a terrible precedent for all of our municipalities to see the legislature normalizing using the home rule process as a work around to the public process of a tax override,” Moran wrote, noting even after the compromise concerns remained “since the Mayor’s compromise focused on compressing the time for shifting the tax burden to businesses rather than tightening the city’s budget.”
A letter to senators in support of the bill was circulated Sunday by numerous Democratic ward committees in the city.
“The City of Boston’s proposal is modest, time-limited, and revenue-neutral but will have a great positive impact on the residents of the city,” the support letter argues.
