12.05.2024/Breaking News
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House of cards? Support for Boston Mayor Michelle Wu’s controversial tax hike plan crumbles as business groups back out
Top business and fiscal watchdog groups on Thursday called for “pausing” consideration of Boston Mayor Michelle Wu’s hotly contested proposal to hike taxes on struggling downtown commercial buildings and other properties.
The move by the Boston Municipal Research Bureau, Greater Boston Chamber of Commerce, NAIOP, and the Massachusetts Taxpayers Foundation, throws a monkey wrench into Wu’s now sputtering efforts to win State House approval for her plans.
The statement by the biz groups came on the heels of another legislative setback for Wu’s tax plan, which would shift more of the city’s tax burden onto struggling office buildings and other commercial properties than currently allowed by law.
State Sen. Nick Collins used a procedural move to block action on Wu’s plan on Thursday. It was the second time this week that the South Boston Democrat halted the mayor’s tax proposal and the move pushes further consideration by the Senate off until Monday.
The statement by the business groups, which had previously, if reluctantly, agreed to Wu’s tax shift plan back in October, followed the release of new numbers that have dramatically undercut the Boston mayor’s argument.
Wu has spent months wrangling with the Legislature over a proposal that would head off a potential $1 billion revenue gap over the next few years as office tower values crumble amid the shift to remote work.
In particular, Wu has been lobbying for a green light to effectively double down and push more of the city’s overall tax burden onto commercial properties than is allowed under state law.
And Wu has warned that without the shift, Boston homeowners would instead be forced to pick up the slack in the form of huge increases to their tax bills.
But in making her case for the tax plan, Wu appears to have inadvertently undercut her own argument.
In a letter Thursday morning addressed to members of the Senate, Wu cited new, previously undisclosed city numbers that suggest that the decline in the value of office buildings and other commercial properties may not be as steep as previously estimated, at least for the current tax year, which is based on 2023 values.
Under the new numbers, city homeowners would face a 10.5 percent increase in their taxes without the tax shift - far lower than what the city had previously warned, and roughly in line with increases of previous years.
Catching wind of the new numbers, busin ess groups reacted swiftly and hit the pause button on a deal they had agreed to just six weeks ago.
“The new property valuations certified by the Department of Revenue last night materially differ from the data provided by the City in discussions in October,” leaders of the municipal research bureau, the chamber, and other groups noted in a statement issued Thursday afternoon.
“Based on these revised figures, we support pausing consideration of Boston’s home rule petition that would shift property taxes onto commercial property owners,” the statement reads.
Thanks Peter. I liked your mention of Boston as the state's capital city. That simple fact is too often lost in the debate over Mayor Michelle Wu's tax hike plan. If we were talking about, I don't know, Granby raising commercial property taxes on the two stores in town, no one would care. But Boston is both the state capital and the region's economic hub. State lawmakers from across the state should be concerned about anything that could negatively impact Boston's commercial real estate market and economy.
Mayor Wu’s plan to tax financially struggling commercial building owners is short sighted. The result clearly will further exacerbate the financial crisis commercial landlords are facing. The only action landlords can take is to increase rents. This will cause tenants to move from the city causing more vacant stores and offices. Boston will lose potential new tenants to other cities with lower rents and a more vibrant business environment. Losing tenants also threatens the job market by driving employers and jobs from the city. This could be as damaging to city residents that higher real estate taxes. This is bad public policy not only for the city but for the state that needs a vibrant capital city to bring employers and visitors to the region. Manage your budget and cut expenses, Mayor Wu. That what business and families are forced to do when faced with an unbalanced budget.