Mayor Menino’s Bill Blocks Governor’s
Residential Tax Relief
Nov 05, 2007 17:00
A story is appearing in many local newspapers, titled
“Report warns of higher tax rate.” As
written, the story would lead residents to think
Mayor Menino is trying to give homeowners tax relief.
It is important for residents to understand that this
is not entirely accurate – and that we have an
opportunity to get some relief now, but only if we
take action immediately.
To fill our property tax levy every year, residents must pay whatever commercial property owners don’t pay. So if commercial taxes fall, the amount of the shortfall shifts to homeowners and renters.
The recent recession sharply reduced commercial property assessments, especially on office towers. To prevent an impending 40% jump in residential taxes, a law was passed in 2004 to raise the existing cap on the commercial tax rate, which was 175% of the basic rate, to 200%, to increase the commercial tax yield. Although officials wanted a permanent increase, the business interests forced a “deal” – a temporary increase, rolling the commercial tax cap back down to 175% by 2008, thus raising residential taxes each year. In fact, residential taxes have risen by 78% since 2003, while most commercial properties will be paying less in 2008, after inflation, than they did seven years ago, and the commercial tax rate is the lowest since 1991.
To give residents some relief from the falling commercial tax rate, Governor Deval Patrick has filed legislation to freeze the commercial tax rate at its current level, 183%, for two more years, instead of letting it continue to roll back to 175% next year as slated by the 2004 law. Menino is trying to deprive homeowners of Patrick’s two-year tax relief, which would save residents an estimated $70 to $90 million, 8% a year, in taxes.
Menino filed a bill (House 3119) to repeal the 2004 law. His bill is backed by the Municipal Research Bureau, which is a powerful corporate lobby, not a city government watchdog as commonly believed, nor a “Boston-based research company” as the story describes them. The 2004 law would drop the tax cap back to 175% next year, but his repeal would require that drop and keep it down, precluding Patrick’s two-year freeze. The Bureau’s director, Sam Tyler, admits in one of the versions of the story: “The urgency of passing the [Mayor’s] legislation …is that there are the bills pending that would keep it up at 183%.” It is urgent -- for the big businesses, who don’t want pay more, at 183%, to give residents some relief.
Menino’s bill would help residents in one way: it would repeal two harmful “dirty tricks” slipped into the 2004 legislation by business interests after the original “deal” was set. The first trick drops the commercial tax rate down to 170% in 2009 – lower than the pre-existing 175% -- permanently shifting more of the city’s tax burden from businesses to residents. The second, and far more devastating to residents, permanently prevents the mandatory residential portion of the tax burden from ever going back down from its highest level, no matter how low housing prices go or how high commercial values go. This portion used to be 30% of the total levy; it is already up at 42%.
This second provision was worded very ambiguously, so the meaning has just become evident as several municipalities were prevented from lowering their residential taxes despite rising commercial assessments. Many officials are angry that business interests used the residential relief law to take advantage of residents – who are already exploited by our lopsided tax system.
With the dirty tricks exposed, the businesses are offering to repeal them -- if they can also block Patrick’s residential relief by repealing the rest of the 2004 law. That’s the new “deal.”
Menino need not squash Patrick’s two-year tax relief to repeal the dirty tricks. He could easily write his bill to accomplish both. But the business lobby is strong, while residents don’t understand enough to fight back. So the Mayor can safely save the business interests millions of dollars at residents’ expense by blocking the Governor’s relief, while courting residents’ support for the bill as a repeal of the dirty tricks – which should never have been enacted in the first place.
Why isn’t he doing his best for the over-burdened home taxpayers?
Contact Mayor Menino (617-635-4500) (mayor@ci.boston.ma.us) and tell him you want the dirty tricks repealed AND the 183% two-year commercial tax freeze enacted.
Then, tell him you want what he promised -- a total “overhaul” of the tax system -- not a “band-aid,” as he called the 2004 law when he testified for it, so that all property owners pay their fair share. Residents shouldn’t have to carry the tax load for everyone else.
To fill our property tax levy every year, residents must pay whatever commercial property owners don’t pay. So if commercial taxes fall, the amount of the shortfall shifts to homeowners and renters.
The recent recession sharply reduced commercial property assessments, especially on office towers. To prevent an impending 40% jump in residential taxes, a law was passed in 2004 to raise the existing cap on the commercial tax rate, which was 175% of the basic rate, to 200%, to increase the commercial tax yield. Although officials wanted a permanent increase, the business interests forced a “deal” – a temporary increase, rolling the commercial tax cap back down to 175% by 2008, thus raising residential taxes each year. In fact, residential taxes have risen by 78% since 2003, while most commercial properties will be paying less in 2008, after inflation, than they did seven years ago, and the commercial tax rate is the lowest since 1991.
To give residents some relief from the falling commercial tax rate, Governor Deval Patrick has filed legislation to freeze the commercial tax rate at its current level, 183%, for two more years, instead of letting it continue to roll back to 175% next year as slated by the 2004 law. Menino is trying to deprive homeowners of Patrick’s two-year tax relief, which would save residents an estimated $70 to $90 million, 8% a year, in taxes.
Menino filed a bill (House 3119) to repeal the 2004 law. His bill is backed by the Municipal Research Bureau, which is a powerful corporate lobby, not a city government watchdog as commonly believed, nor a “Boston-based research company” as the story describes them. The 2004 law would drop the tax cap back to 175% next year, but his repeal would require that drop and keep it down, precluding Patrick’s two-year freeze. The Bureau’s director, Sam Tyler, admits in one of the versions of the story: “The urgency of passing the [Mayor’s] legislation …is that there are the bills pending that would keep it up at 183%.” It is urgent -- for the big businesses, who don’t want pay more, at 183%, to give residents some relief.
Menino’s bill would help residents in one way: it would repeal two harmful “dirty tricks” slipped into the 2004 legislation by business interests after the original “deal” was set. The first trick drops the commercial tax rate down to 170% in 2009 – lower than the pre-existing 175% -- permanently shifting more of the city’s tax burden from businesses to residents. The second, and far more devastating to residents, permanently prevents the mandatory residential portion of the tax burden from ever going back down from its highest level, no matter how low housing prices go or how high commercial values go. This portion used to be 30% of the total levy; it is already up at 42%.
This second provision was worded very ambiguously, so the meaning has just become evident as several municipalities were prevented from lowering their residential taxes despite rising commercial assessments. Many officials are angry that business interests used the residential relief law to take advantage of residents – who are already exploited by our lopsided tax system.
With the dirty tricks exposed, the businesses are offering to repeal them -- if they can also block Patrick’s residential relief by repealing the rest of the 2004 law. That’s the new “deal.”
Menino need not squash Patrick’s two-year tax relief to repeal the dirty tricks. He could easily write his bill to accomplish both. But the business lobby is strong, while residents don’t understand enough to fight back. So the Mayor can safely save the business interests millions of dollars at residents’ expense by blocking the Governor’s relief, while courting residents’ support for the bill as a repeal of the dirty tricks – which should never have been enacted in the first place.
Why isn’t he doing his best for the over-burdened home taxpayers?
Contact Mayor Menino (617-635-4500) (mayor@ci.boston.ma.us) and tell him you want the dirty tricks repealed AND the 183% two-year commercial tax freeze enacted.
Then, tell him you want what he promised -- a total “overhaul” of the tax system -- not a “band-aid,” as he called the 2004 law when he testified for it, so that all property owners pay their fair share. Residents shouldn’t have to carry the tax load for everyone else.
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