December 24, 2024
Anyone following Mayor Wu’s tax shift proposal over the last few weeks knew that its fate hinged on whether state-certified property valuations constituted the “dramatic increase” in homeowners’ property tax bills that she had warned about for months.
What has not been covered, however, is how months earlier, Wu and her top budget officials created the conditions for wide-spread skepticism around the numbers they used. From February to July, the administration’s harsh criticism of independent experts and changing rhetoric on falling office values created the whiplash that ultimately killed the tax shift proposal.
In February, a report titled “The Fiscal Fallout of Boston’s Empty Offices” forecast that falling office values would lead to a $1.2b to $1.5b shortfall in Boston’s commercial property tax revenue. The report was produced by a new policy-focused non-profit, the Boston Policy Institute, Inc, in partnership with the Center for State Policy Analysis at Tufts University.
While the report held Boston blameless and called the fall in office values “an economic act of God,” it got intense pushback from City Hall, both behind the scenes and in public.
In a statement responding to the report, the City’s Assessing Commissioner Nick Ariniello described Boston’s strong fiscal position: “We don’t feel that the current real estate environment is going to lead to budgetary concerns.”
On March 31, the same week that Wu announced her tax shift proposal, the City’s CFO, Ashley Groffenberger, went on NBC10’s At Issue, where she questioned BPI’s findings: “[The report] makes two key assumptions: one that office values will fall, and two that we will lose property tax revenue as a result of that.”
On April 10, Wu went further, saying: “To point to some false information that the city might be experiencing a billion-dollar shortfall — that is just simply not true.”
BPI wasn’t alone in receiving harsh criticism.
On May 2, the Boston Municipal Research Bureau (BMRB) published its analysis of the mayor’s proposal. Kenzie Bok, a former city councillor and Wu’s pick to run the Boston Housing Authority, wrote a scathing response, accusing BMRB of “protect[ing] large commercial real estate interests at the expense of Boston’s most vulnerable residents.”
Then suddenly, after months of dismissal, the Wu administration’s view on the impact of falling office values on Boston’s budget changed. City officials still dismissed BPI’s report, but they started warning about its central conclusion – that falling office values would lead to enormous increases in homeowners’ property tax bills.
It started with a reversal on BMRB’s May report. In an op-ed published May 30, Groffenberger warned that falling office values would shift the tax burden, writing: “Based on the Boston Municipal Research Bureau’s analysis, Boston could see a nearly 17 percent increase in residential taxes next year if the city doesn’t intervene.”
Then, on June 24, Wu went on WBUR’s Radio Boston, and made a much larger and more dire claim: “Homeowners could see a 33 percent spike in their property tax bill, according to her office’s projections.” She also cited this 33 percent number in July on GBH’s Boston Public Radio.
The mayor eventually admitted that she had overstated her case in two ways at the July 16 State House hearing on the tax shift under questioning from House Chair Mark Cusack. First, she clarified that Groffenberger’s 17 percent and her own 33 percent were the same estimate presented in two different ways, and second, that the estimates did not come from her office in City Hall, but the BMRB’s May’s report.
These actions from earlier this year show that City Hall’s tactics this past fall were not new: the Wu administration regularly engages in unfair criticism of outside experts and overstating statistics. The effect of those tactics not only prevented a data-driven conversation about Boston’s budget, but it also killed the tax shift proposal.
The result is that the Wu administration’s credibility and the wider public conversation are badly damaged at a time when Boston needs both to tackle the budget crisis.
Gregory Maynard is the executive director of the Boston Policy Institute, Inc.