December 4, 2024
State Sen. Nick Collins delayed action on Monday on a controversial, time-sensitive Boston property tax reclassification bill, putting it on ice until after the deadline for action recommended by Mayor Wu.
After months of public and private talks, Collins used a procedural maneuver available to senators to punt the matter until the next session, which senators set for Thursday. Other Democrats also raised concerns about the bill on Monday.
Compromise language had been hammered out between the mayor’s office and business groups to temporarily reconfigure the way it splits its property taxes between commercial and residential taxpayers to prevent a major increase in bills for residents.
“Tax bills are issued to property owners on Jan. 1, but there’s a lot of work that leads up to that. So in order for our team to use this mechanism and prepare bills for that deadline and for the [Department of Revenue] certification and City Council approval and all those steps, we would need this law signed by the governor within the next two weeks,” Wu said at a legislative hearing on Nov. 20.
Two weeks from that date was Wednesday of this week.
Collins said he was delaying the vote until the Boston City Council could hold its annual tax classification hearing on Tuesday. The hearing will also cover diversifying the city’s budget — as an increasingly heavy reliance on property taxes over the past two decades has led to a situation where decreasing commercial values are threatening to destabilize the city’s tax base.
“Most of this issue has been debated with hypothetical figures as uncertified numbers have been varied,” Collins said during the session. “Tomorrow, the Boston City Council will have their annual tax classification hearing. It’s my hope that information will be made available to the council and the public so we can get a full picture, and if members of the Senate and the constituents we serve get that as well, we all deserve that.”
The city last week submitted to the Department of Revenue its property valuations, which will be used to calculate January tax bills, so Collins said he’s hopeful he’ll get a better understanding during Tuesday’s hearing as to what the “real [budget] gap” is.
“I’m opposed to the idea of doing something without the facts. And I think tomorrow, hopefully we’ll get that, at least from somebody at DOR or the city, and understand what our budget gap is and how that can be mitigated and is this the only tool? And I think if we don’t have that information it’s hard to make that decision accurately,” the South Boston Democrat later told reporters.
The mayor originally predicted residential property owners could see as much as a 33 percent increase in their taxes come January, as commercial owners have seen a reduction in taxable value as fewer employees have returned to offices and some employers have downsized their footprints in the wake of Covid-19. The mayor’s office recently shrunk that estimate to up to 28 percent — and other groups have smaller estimates on how much residents’ tax bills could actually increase in the new year without action on Beacon Hill.
“Our administration has been working diligently to provide all possible information and answer any questions on this matter for many months,” a Wu spokesperson said Monday. “Today is the first time we are hearing about the senator’s specific concerns, and we will continue trying to reach him to understand the information he is seeking. In addition to reaching a compromise consensus with business groups, we have testified at multiple City Council and State House hearings, provided available data as it has been finalized, held town halls across the city, and reached out to each senator multiple times to ask for their feedback and concerns. We will continue to prioritize all possible outreach on this short timeline before tax bills must be finalized to protect residents and stabilize bills for all taxpayers.”
Collins told reporters that he had not had a one-on-one conversation with Wu about his concerns, but planned to talk to her later on Monday.
Sen. Susan Moran, a Democrat from Falmouth who leads the Revenue Committee and has kept publicly quiet about her thoughts on the bill, spoke during Monday’s session to “provide context” on the bill, and validated the concerns of those opposed to the legislation.
“Boston’s commercial sector is essential not only to the city’s economic vitality, but also to the state’s,” Moran said. “There’s no doubt that how we pursue this issue will set a precedent for municipalities across the state... Today’s vote is important not just for Boston, but for the entire commonwealth. It affects our constituents who own businesses and property in Boston and many municipalities are watching this to see how the Legislature acts with respect to changing the balance of the residential/business tax balance.”
Moran quoted representatives of business groups who have expressed reservations about the move, including Tamara Small, the CEO of the National Association of Industrial and Office Properties of Massachusetts, Doug Howgate, president of the Massachusetts Taxpayer Foundation, and Greg Maynard, executive director of the Boston Policy Institute.
“This is essentially being viewed as kicking them when they’re down. This is really just going to exacerbate the value loss property owners are seeing,” Moran said, referring to a comment that Small made.
Sen. Michael Rodrigues, a Democrat from Westport who leads the Senate Ways and Means Committee, agreed with Moran that if the state allowed Boston to restructure its tax scheme, other municipalities would also want to do so.
Rodrigues said he was present at Monday’s Senate session to answer questions from senators about a $700 million spending bill. “It’s pretty nice to be an observer of drama, rather than up to my eyeballs, as I usually am,” Rodrigues quipped. “We’ll let the Boston folks deal with the Boston issues. I’m just going to continue to focus on the financial situation of the Commonwealth.”
He later added, “Boston is Boston, right? So, the rest of the state always has their eyes on Boston. I’m sure that other communities are looking at what the Legislature does for Boston, and are going to ask questions of their senators: why can’t you do it for us also? So, yeah, that’s always the case. Boston is Boston.”