How likely is a potential downturn in Boston property values to mirror a crisis that prompted legislative action in 2004? Did Mayor Michelle Wu send the wrong message by proposing to rebalance commercial and residential taxes while also advocating for an 8% increase in city spending? Will workers eventually return to the office more regularly, or will the changes brought on by the pandemic be...
Councilor Gabriela Coletta, who chairs the Committee on Government Operations that reviewed the home rule petition, said she's worried about the"blanket approach." Wu's proposal would allow the city to increase the maximum commercial shift to 200% if business property values drop significantly, then gradually shift it back down a bit each year until it returns to 175% in year five.
A report published in February by the Boston Policy Institute and the Center for State Policy Analysis at Tufts University estimated the decline could result in a cumulative commercial property tax shortfall of $1.2 billion to $1.5 billion between 2025 and 2029. Nicholas Ariniello, commissioner of the city's assessing department, replied that the plan would ask commercial property-owners to take on additional burden at the start and then shift the extra load back over to residents over several years.
"The strength of this is that we're so closely mirroring 2003-2004," he said."Our hope is that it's going to give the Legislature a lot of comfort that we're not trying to reinvent the wheel."Marty Walz, a former state representative and lobbyist who is interim president of the Boston Municipal Research Bureau, warned that"2024 is not 2004" because work patterns that changed in the pandemic might remain permanently altered.
Groffenberger suggested the tax burden shift could be a better option than trimming the other side of the ledger. She said in 2004, the city would have needed to cut about $100 million in spending to achieve the same balancing act as its tax rate changes.
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