A local state law opt-in could provide exemptions to small businesses that can’t afford any increase should the city’s proposed new tax levy be approved.

Earlier this year, in April, Mayor Michelle Wu sent a home rule bill to the Legislature entitled “Petition for a Special Law Re: An Act Relative to Property Tax Classification in the City of Boston.” that would shift the tax levy on commercial properties only if commercial property values in the city’s downtown core continue declining as predicted, protecting property owners from excessive tax increases. Shifting the tax levy to protect residential property owners, some of whom are house-rich and cash-poor, and renters who would potentially absorb these taxes in rental increases, seemed like a potential no-brainer for me and for many of my colleagues.

However, top of mind was also the fact that commercial property tax increases could trickle down to our beloved and essential neighborhood “Mom & Pop’ shops. I understood that we had a similar responsibility to protect and support our small businesses, many of which are still reeling from the pandemic, and the exorbitant increases in commercial rents.

Nationwide, we are seeing the decline in commercial property valuations due to the economic drawbacks following the pandemic. Businesses are struggling to stay afloat, and many are faced with the difficult decision of continuing to operate under tight margins or closing their doors. Cities across the country are facing this new reality, and Boston is no outlier. Still, we’re uniquely vulnerable due to our heavy reliance on property tax revenue to fund day-to-day operations and city services. As we watch this unfold, Boston needs to take tangible action now.

I oversaw the review and passage of this proposal as chair of the Government Operations Committee of the Boston City Council earlier this spring. Simultaneously, I made a commitment to find a way to leverage a “carve out” that would financially bolster our local businesses – our barber shops, salons, retail stores, bakeries and so many of the places communities rely on for their day-to-day needs. These shops are the lifeline of our neighborhood corridors, and it is incumbent upon us to ensure that they can comfortably and successfully continue to keep their businesses in Boston.

What is Boston without being able to stop for a lemon slush on a sweltering summer day or to visit the shop with the perfect Italian sub? Being able to walk to the “hole in the wall” convenience store or bodega down the street when you’re running low on toilet paper because Shaw’s is too far away, or to grab your favorite bouquet from your local flower shop, is part of what makes our beautiful Boston so vibrant. No first-class city functions without its small businesses, many of which are often first generation or minority-owned establishments that act as an economic mobility tool for families.

In the midst of researching and acquiring all the data possible to ensure that approving the new tax levy was a sound decision, my office found an existing Massachusetts General Law 59, Section 5I (M.G.L. c. 59, § 5I) that allows local municipalities to opt into an exemption that would provide financial relief of up to 10 percent of their assessed value for small businesses valued under $1 million with a maximum of ten employees.

The opt-in is a policy that the City of Boston could quickly implement to get more money in the pocket of small business owners and protect them from the tax burden being shifted onto them.

Understanding that the state law opt-in, as it currently stands, might not fully meet the moment as many commercial properties in Boston are valued over the one million dollar threshold, I am also working on increasing the maximum assessed property value allowed to $2 million, $3 million, or even $4 million to ensure that more small businesses are eligible for this exemption in Boston.

However, this amendment requires a home rule petition, which would need to be approved by the City Council, the mayor, and then the Legislature. Additionally, House Bill H.2952 was filed last year to increase the Small Commercial Property Tax Exemption from $1 million to $4 million. That bill is now accompanied by a Study Order, which has yet to take place. The current opt-in policy, which could affect more than 6,000 small businesses, is the best way to financially support our small businesses immediately.

Boston’s array of small businesses reflect our cultures, communities, and values as a world-class city. These small businesses not only operate in our neighborhoods, but they also provide employment opportunities for residents and inspire neighborhood pride. By opting into this small business exemption, we’re helping our restaurants, corner stores, laundromats, and dry cleaners stay open and operate day in and day out. As a city, we are indebted to them and must always look at ways to help them continue to flourish.

Gabriela Coletta Zapata is the city councillor representing District 1, which includes precincts in East Boston, Charlestown, and North End/Waterfront.