This post about Boston’s tax shift bill contains four parts: (1) My statement on the floor of the senate today. (2) Senate President Karen Spilka’s statement released this evening. (3) Resources for Boston property taxpayers. (My office is available to help any constituent identify relief options.) (4) Draft legislation that I plan to file to create local options for mitigating the third quarter tax spikes that do occur in many communities from time to time. The statements from myself and the Senate President, although concise, reflect months of listening and deliberation. Additionally, WBUR did a good interview with me that explores the issues.
My floor remarks
December 9, 2024, Senate Chamber
I want to first thank the Mayor of Boston for endeavoring to address the challenges raised by the decline in downtown Boston’s economic activity.
And I also want to thank Senator Collins for insisting on waiting until we have real numbers before taking action on this home rule petition.
Numbers matter.
Massachusetts has a long standing framework of limits on local property taxation and we should not lightly alter that framework which is rooted in the constitution, in previous popular referenda, and in statute.
I have always had strong concerns about this proposal to alter the rules in an ad hoc manner.
Now that we fully understand that Boston taxpayers are not looking at a 33% tax increase, but rather a 10% year-over-year increase, it is clear that we should lay this proposal aside.
Boston is going through a difficult adjustment. For the past couple of decades robust downtown growth has allowed Boston to increase spending without heavily burdening residential taxpayers. Those days appear to be coming to an end and over the next few years we may see a continuing shift in burden towards residential taxpayers. No one has proposed to permanently prevent that shift. As it turns out, this year’s tax increase appears to be a reasonably phased step in that painful process.
Boston needs to set its tax rates for Fiscal 2025 and I feel that we should end any uncertainty by formally setting this bill aside.
At the same time, I feel concern for the City’s most vulnerable low-income homeowners and I feel that the City does have resources that it could precisely target to those homeowners and would be happy to work with the Mayor and my colleagues to that end.
Many communities face third quarter tax spikes from time to time, often in the wake of voter-approved tax increases, and general legislation to allow carefully targeted relief could be appropriate.
Statement from Senate President Karen E. Spilka
BOSTON (12/09/2024) – Today, Massachusetts Senate President Karen E. Spilka (D-Ashland) made the following statement regarding the City of Boston’s tax proposal:
“Despite hard work and effort, the path forward for the City of Boston’s proposal to shift its tax burden from residents to businesses has become increasingly challenging. Having listened to the concerns of both commercial property owners and city residents, it was important for the Senate to seek a solution that would preserve the delicate balance of protecting the economic powerhouse that is Boston while addressing the very real concerns of property owners as we all face uncharted territory in a post-COVID Commonwealth.
I thank Mayor Wu, the City of Boston, the Boston City Council, and the business community for reaching a compromise that sought to strike that balance. I want to especially thank the Senators who so ably represent the City.
As this compromise legislation has progressed through the Senate, the Department of Revenue recently released new certifications of data submitted by Boston that predicted a much more modest tax increase for residents than previously presented by the City. This new understanding has left stakeholders and Senate members with serious concerns about the bill’s impact on the competitiveness of the state as a whole. Many in the Senate believe that this proposal tips the scales too far in one direction, with a stalled economic recovery in Boston as an unfortunate potential outcome.
The Senate is acutely aware of the affordability issues many residents of the Commonwealth face. That’s why we prioritized passing the Affordable Homes Act and a once-in-a-generation tax relief package—both of which are now law. To protect our most vulnerable residents, including seniors, the tax relief bill doubles the maximum senior circuit breaker credit to make it easier for seniors who struggle with high housing costs to stay in their homes.
My job as Senate President is to work toward compromise, always; without it we would accomplish nothing. It is also my job to listen to the members of the Senate, and I have heard clearly that there currently is not sufficient support for this proposal. I will therefore not bring it to the floor for further debate.”
Resources
Local property tax break information
- Property tax exemptions available (City of Boston)
- State guide to local property tax exemptions
- Older-Adult property tax work-off (City of Boston)
- Abatement assistance (City of Boston)
State income tax breaks for property tax payers
- Massachusetts senior circuit breaker tax credit
- Miscellaneous state income tax credits for homeowners — lead paint, septic, solar
Background resources
- Setting the tax rate (technical explanation of tax rate process)
- Municipal databank (compare property tax rates and bills across municipalities)
- City of Boston online (view assessments by parcel)
Draft legislation
The draft legislation below would create a flexible mechanism for municipalities to target relief to vulnerable tax payers at the moment that they most need it. The relief would smooth over the sharp spike from the 2d quarter bill to the 3d quarter bill in years when taxes are going up. I will file the legislation for consideration in the next legislative session.
AN ACT TO PREVENT PROPERTY TAX BILL SHOCKS
Chapter 59 of the General Laws is hereby amended by inserting after Section 5O, the following new section:
Section 5P
(a) As used in this section following words shall, unless the context clearly requires otherwise, have the following meanings:
“tax shock year” – a fiscal year in which the residential property tax levy growth percentage in a municipality exceeds ten percent.
“owner” – an owner of property or a beneficiary of a trust which is an owner of a property
“residential property tax levy growth percentage” the percentage by which the residential property tax levy for a fiscal year less any portion attributable to new growth exceeds the residential property tax levy in the previous fiscal year”
“eligible tax shock property” – any property which is a senior qualifying property, a MassHealth qualifying property, an unemployment qualifying property, or a high need neighborhood qualifying property.
“senior qualifying property” – a property with less than 5 residential units which is occupied by an owner of the property who will be 65 or over as of December 31 of the tax shock year.
“MassHealth qualifying property” – a property with less than 5 residential units which is occupied by an owner of the property and the owner’s household includes a person who was enrolled in MassHealth at any time during the tax shock year before December 31 of the tax shock year.
“unemployment qualifying property” – a property with less than 5 residential units which is occupied by an owner of the property and owner’s household includes a person who received unemployment benefits for twelve or more weeks during the tax shock year before December 31 of the tax shock year.
“high need neighborhood qualifying property” – any residential property which, as of July 1 of the Tax Shock Year, lies entirely or partially within a qualified census tract as defined in section 42(d)(5)(B)(ii) of Chapter 26 of the United States Code.
“tax shock prevention credit” – a credit awarded to the owner of an eligible tax shock property against the third or fourth quarter tax bill in a tax shock year.
“third quarter tax shock prevention credit percentage” – a percentage determined by a city or town which is less than four thirds of the residential property tax levy growth percentage.
“fourth quarter tax shock prevention credit percentage” – a percentage determined by a city or town which is less than two thirds of the residential property tax levy growth percentage.
(b) In any city or town which accepts the provisions of this section for a particular tax shock year, the city or town may award tax shock prevention credits for eligible tax shock properties subject to the provisions of paragraphs (c) through (f), provided that the city or town may accept the provisions of this section in whole or as to only some of the four types of eligible tax shock properties.
(c) Tax shock prevention credits shall not exceed the applicable tax shock prevention credit percentage applied to the second quarter tax bill for the property.
(d) The applicable quarter tax shock prevention credit percentage shall be the same for all eligible properties.
(e) Property tax bills shall be computed and mailed as usual without application of the tax shock prevention credit, but
(1) for eligible tax shock properties which the city or town is able to identify before sending the bill, the city or town shall include in the mailing a form notifying the taxpayer that their property is an eligible tax shock property, specifying the exact amount of the tax shock prevention credit and the amount of the property tax bill net of the credit, and directing the taxpayer to send an acceptance under pains and penalties of perjury of credit eligibility along with their tax payment as reduced by the tax shock prevention credit.
(2) for properties which the city or town is unable to identify as eligible tax shock properties before sending the bill, the city or town shall include in the mailing a form specifying the exact amount of the tax shock prevention credit that the property could be eligible for and the amount of the property tax bill net of the credit, and instructing the taxpayer how to claim the credit and reduce their tax payment by the amount of the tax shock prevention credit.
(e) To be effective, acceptance by a city or town of this section must occur before the mailing of third quarter tax bills.
(f) Prior to accepting this action, the city or town shall certify that it has funds available to cover the cost of potential tax shock prevention credits and seek approval of the division of local services. No acceptance of this section shall be valid without the approval of the division of local services.
(g) State agencies in possession of data which would assist a city or town in indentifying or verifying eligible tax shock properties shall promptly provide that data upon request.
(h) The acceptance of the provisions of this section shall not alter the property tax levy limit for the city or town.
(i) If the acceptance of the provisions of this section as to any class of eligible tax shock property properties is determined to be unconstitutional, this shall not affect the eligibility of other classes.
Will, if you would like to see Boston cuts its budget, then you should outline every cut in your district you would like to see made and be forthcoming t your constituents about the harms you would like to see caused to them and the city rather than hiding behind rhetoric.
Your behavior today was deeply disappointing, and your double standard in your advocacy for a similar home rule petition for Watertown is jarring and revealing.
The Watertown petition did not raise the business tax factor above 175% as the Boston proposal would. But your comment reinforces my concern that any proposal like this sets very bad precedent.
“Harms”= a slight squeeze of the government teat.
Don’t worry, Watertown is doubling its affordable housing stock. Nothing yet threatens the plan of gouging working and middle class taxpayers to pay for their own votes to be replaced by the dependent poor while the upper and professional classes indulge in the finest luxury beliefs.
Hence the accelerating emigration rate.
Why is there no discussion on cutting the budget?
The fact of the matter is that man senators are property owners and worst than some on the residential landlords and treat some of their tenants the same as landlords treat their tenants,which is the real reason the Senate don’t want to address the issue,and for the fact the so-called leaders can use their position to shield their names for the appearing on the property, therefore folks really need to stop taken an elected officials words as God and start doing their own research. it’s not that hard stop being brain washed because at the end of the day your the one who suffers for not doing your own research
Because they’re tax-and-spend Democrats.
Thank you for this well thought out position Will. I believe that the Senate has properly balanced the concerns. The numbers are clear. As I think I’ve said to you before, that third quarter increase can be a major challenge, especially in a neighborhood where home values are increasing more quickly than the city average. Once again, thanks.
Mayor Wu should cut the city’s budget.
How many useless programs are there?
Let’s remember too that Wu wanted RENT CONTROL. which the state’s voters wisely tossed out in 1994.
Rent control reduces property values because the owner gets less rent from the units and the units deteriorate.
That in turns leads to a reduction in assessments (or slower growth), leading to less tax revenue.
Not to mention fewer housing units being built and/or well-maintained.
Wu is incompetent.
BTW, how much is Boston and the state spending on illegal aliens?
Answer: A billion $ and more and growing every day.
You get what you vote for.
What exactly is Wu’s appeal? That she’s Woke? That’s not sufficient to run a major city, as we now see.
It’s interesting that someone who lives in Belmont wants to tell our elected Mayor how to run the city. He quotes Senator Collins as a source. He doesn’t mention all of the real estate money campaign donations that Senator Collins has received recently. I wonder where Collins got his information? Oh no, not the real estate industry, heaven forbid! You mean that he would take their money and act as their mouth piece on this issue, I can’t believe it. With all the data at their disposal I wonder if they know what the Boston taxpayers think about this issue.
As a supporter of home rule and Mayor Wu I think it’s better if he spends his time working on Belmont real estate taxes and leave us to manage our own business.
Senator Brownsberger’s ELECTED (this year – unopposed!) district is : Most of Fenway, Allston, Brighton, Watertown, Belmont, West Cambridge — Ward 9 and precinct 2 of Ward 8 and, by no means, is he uninformed. You can’t have a society without taxes, and, preferably, fair taxes. That’s what this discussion is about – and it could apply to any town in MA.
I thought Mass was subject to Prop 2 1/2? Doesn’t it require a referendum vote to override this?
Numbers do matter, Senator.
“The Department of Revenue recently released new certifications of data submitted by Boston that predicted a much more modest tax increase for residents than previously presented by the City.” – Karen E. Spilka
Can you point to a link to the DOR analysis that turned things on its head?
Will, I am glad you pushed back on the Boston tax proposal. It is clear that Mayor Wu does not want to cut her bloated city budget and would rather foist the bill onto businesses. That would create a “doom spiral” where businesses would just leave Boston, leaving residents to hold the bill. Also I think Mayor Wu was unforthcoming with the proper numbers, which is a serious breach of ethics, and she should be held accountable for it. But she won’t because when has a Democrat ever been held accountable in this state? (City Councillor Tania Fernandes-Anderson is already back at work as if her Federal indictment never happened…)
Also, as I’ve said many times before, I think we need to address the illegal immigration issue before we can fix the housing problem. The influx of many unvetted migrants into our “sanctuary” state is stretching an already tight housing market to the max. Not to mention the towns and cities who are stuck providing services for people who are in our Commonwealth illegally. Thankfully the new “Border Czar” is going to start enforcing Federal immigration law on Jan 20th and it can’t come a moment too soon.
Thank you, Bob. You nailed it! I find it amusing when state elected officials express their concern about taxation fairness, while at the same time they knowingly saddle the Commonwealth and local communities with the very high costs associated with illegal immigration. Those costs are carried by Massachusetts taxpayers. So why the double standard?
Will, as always, I appreciate your thoughtful, analytical approach to making difficult decisions like this. Even when I disagree with you, I trust the integrity of your thought processes.
I have to agree that Mayor Wu’s proposal would set a bad precedent at a time when Massachusetts needs to welcome business, not drive it away. Belmont is desperate to increase our commercial tax base–I wish we had the types of resources Boston has. In the midst of Belmont’s current budget cycle, I am constantly mindful of the need to balance legitimate needs and desires across a wide range of interests.
The shift of property values from commercial to residential is part of the post-covid changes to our work and commuter patterns, and it is going to take a while to shake out. The increase in residential property taxes is going to affect tenants as well, and likely immediately. Many leases have a clause allowing a rent increase if taxes go up during the term of the lease. I think legislation allowing for some mitigation of third-quarter bills would be beneficial, but there ought to be a way for it apply to all properties. Currently certain betterments, such as sewer connections, can be spread over a number of years. Something like that might make sense and be easier to administer. Perhaps I am not understanding the legislation correctly, but the credit would seem to be just more shuffling around of the tax burden.
Will,
If you don’t want Boston to raise rates then consider other ways. For starters repeal the outdated limit on liquor licenses. This would increase the demand for commercial property and provide more sales tax revenue to Boston. The current limit is an artificial handicap imposed by the state that does not make sense. It might not address everything but it would show the state is serious about improving Boston’s finances.