To the Editor:

City Councillor Coletta Zapata’s commentary last week (“City can protect its small businesses from increases in any new tax levies”) detailed the councillor’s pursuit of protections for some small businesses from the increase in commercial property taxes if Mayor Wu’s CRE Tax Hike is approved by the Legislature. Her piece raised three questions which haven’t yet been addressed in public. One is a big picture question and two more are technical ones. 

The big question is: Why did the City Council pass Wu’s plan, with its clear and well-identified impact to the city’s small businesses, without this piece of mitigation ready to go? It is clear from the commentary that while the CRE Tax Hike is advancing on Beacon Hill, the carve-out to protect small businesses from that tax increase is still on the drawing board. 

The first technical question is: Exactly how many small businesses will get a break with the $1m-and-under property value threshold?

City officials said that more than 6,000 properties meet the valuation requirement, but the commentary makes clear that to have the desired impact the value threshold may need to be raised higher. However, that increase would require Beacon Hill approval, which negates the original appeal of the program: that it can be implemented without state authorization. 

The second technical question is: Can the Wu administration implement this program if it is approved? At a recent hearing, the city’s CFO, Ashley Groffenberger, said that implementing this program would be “a significant administrative lift for the department.”

She added: “We estimate it would take 24 working days, or five weeks of them doing nothing else, in order for them to do the work needed to implement this in time before the tax rate setting.” All that work is before adding vetting all the additional eligible properties if the threshold was raised from $1million to $4 million.

It is clear from the commentary and the recent hearing that it is the Wu administration that will ultimately be the ones to answer these questions. They created the problem as the authors of the CRE Tax Hike and the public advocates for its passage through the Council and the Legislature.

Answering these questions is not just important for this specific debate, but for the larger issue this debate is a part of: How to rethink Boston’s budget in the face of declining office values and a shrinking share of city property taxes being paid by downtown office buildings.

– Gregory Maynard

The author is the executive director of the Boston Policy Institute, Inc, a non-profit focused on the challenges facing the City of Boston & Commonwealth of Massachusetts.