Boston bill puts taxes, spending first – Boston News, Weather, Sports

On October 30, 2024By Karl

Boston Mayor Michelle Wu’s plan to temporarily shift a larger share of the city’s property tax burden to commercial owners to ease the impact of expected tax increases on residents appears to be on the fast track to passage in both City Hall and the State Assembly, but Tuesday It is clear from the hearing held on 2020 that the problem will continue until the election year.

Wu and his allies have been warning for months that Boston residents could face a sudden and dramatic increase in property tax debt due in large part to a decline in commercial property values fueled by shifting office dynamics in the wake of COVID-19. It has been seeking state approval since the spring to increase the city’s share of taxes from commercial property owners to ease the pain of residents, but has faced resistance or opposition from some business groups and city council members.

“If the city were a human body, wouldn’t it be ‘do we tax the head or do we tax the heart’? And both sides of these things are difficult. You don’t want to put pressure on either of them because they are vital. But we also have to share the burden,” Councilman John FitzGerald said at Tuesday’s hearing of the City Council Governmental Operations Committee.

Supporters said Tuesday’s hearing was at least the fifth public hearing on the mayor’s idea, but the first on the newest version of the home rule petition. Wu’s first offer He cleared the City Council. (8-4 in June) and the House of Representatives (132-24 in July), but Senate President Karen Spilka I never brought up the issue. instead, he urged Wu to continue negotiations with four Boston-based business groups.

These talks led to a breakthrough last week and Wu files new home rule petition It reflects the reconciliation that must now start from the beginning.

“It didn’t need to be this messy and it didn’t need to have residents confronting businesses or having public disputes with government and business,” Councilman Ed Flynn, who voted against Wu’s original proposal, said at the hearing at City Hall. “We should have listened to the consensus of financial watchdog groups and experts months ago.”

Flynn, a South Boston Democrat who has been discussed as a possible rival to Wu in next year’s mayoral election, said the bigger issue is the 8 percent spending increase and lack of a hiring freeze in the last city budget.

“But the long-term issue in my mind is that we need to look at our tax structure and our revenue,” he said. “I think the city of Boston is facing long-term fiscal problems.”

During his questioning of city officials, Flynn focused on the $171 million price tag for Boston Public Schools transportation and what the increase to $180 million next year would mean for the budget. He challenged Finance Director Ashley Groffenberger on what the next city budget’s growth percentage might be.

Groffenberger said it’s too early to tell what next year’s city budget will look like, and the city isn’t considering a hiring freeze. When asked why a hiring freeze was off the table, Flynn said it was because “we don’t have a revenue problem in the city.”

Flynn: “Do we have a spending problem?” he asked.

Groffenberger replied: “No. “Our expenses and income are equalized.”

Flynn disagreed, saying, “We have a spending problem in the city.”

Boston Municipal Bureau of Investigation Interim Director Marty Walz, who represented four business groups involved in settlement talks at Tuesday’s hearing, urged council members to support the mayor’s proposal but acknowledged the city council and administration still have a lot of work to do on the issue. We do this to ensure the stability of the city’s economy.

“The home rule petition is not a solution to Boston’s complex public finance and economic development challenges. The new market dynamic for commercial real estate is not a temporary or cyclical change; “This means the city (all of us) must grapple with long-term budget impacts through responsible approaches to budgeting,” he said. “Additionally, it is critical that the city work with the business community to promote economic growth and development, ensuring Boston’s future financial health and vitality.” carries.”

For Council Member Julia Mejia, the debate around Wu’s tax amendment proposal presents an opportunity to tackle some of the changes aimed at driving longtime residents away from the city.

“What I heard most from our public testimony was some people who bought their homes in the ’70s and ’80s when no one wanted to live in Boston. Suddenly everyone wants to live here, and suddenly everyone’s trying to get kicked out of school, right? That’s what we’re all having this conversation about.” It’s like how you experience it. It may not be that way, but that’s how people who grew up here feel,” he said. “I think there’s something to be said about what this moment is about because our property values — we have people building apartments next to us and those apartments are going for $800,000. We bought our homes for just $50,000. How do we deal with this? And I think that, even though it’s not part of this conversation, I think it gives us the opportunity to explore that even more deeply.”

Councilwoman Gabriela Coletta Zapata, who chairs the committee, said at the end of the hearing that “I will put this issue to a vote tomorrow” when the full City Council meets. A vote of the full council could send the proposal back to Beacon Hill.

“The bottom line for me is that we’re on a timeline and if we don’t do something now, we’re not helping anyone. And this is an opportunity to provide a soft landing to people who are economically weak, house rich and cash poor. And I think my grandmother, if she’s still around, is in that category,” Zapata said. “And if we don’t do that, if we don’t move forward, there will be real consequences.”

Tax Shift Plan Version Two

State law allows cities and towns to tax residential and commercial real estate at different rates, raising the commercial rate up to 175 percent of a single combined rate.

Wu’s latest home rule petition would allow the city to reach a maximum change of 181.5 percent in fiscal year 2025, 180 percent in fiscal year 2026 and 178 percent in fiscal year 2027, and would be limited to that three-year period. It also aims to give the City Council the authority to provide up to $15 million annually in aid to small businesses during this period.

The petition would also authorize the City Council to increase the personal property tax exemption threshold for small businesses from $10,000 to $30,000; Wu’s office said the move would mean relief for an additional 2,183 businesses (4,718 in total).

The mayor had initially proposed increasing the maximum commercial shift to 200 percent and then gradually reducing it to 175 percent over five years. To gain the support of the House of Representatives, he later promised that the maximum change would be capped at 190 percent and the wind-down period would be shortened to three years.

Wu’s office forecast at the beginning of this month He said an increase of nearly $500 in property taxes for the average homeowner without any action should take next steps quickly to avoid impacts on Bostonians.

“Legislation must be completed by November for this mechanism to be applied to upcoming January 2025 tax bills, so we request swift action to meet these tight deadlines for Council and State approvals,” Wu wrote in his post. sent a letter to council members.