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Boston City Council approves measure that would temporarily increase tax rate on commercial properties

The City Council voted 12-1 today to ask the state legislature and the governor to let Boston increase the tax rate on commercial properties to higher levels than normally allowed over three years as a way to protect homeowners from potentially large property tax rates.

Only Councilor Ed Flynn (South Boston, South End, Chinatown, Downtown) voted against, arguing both that the council was trying to pull a fast one over residents and businesses and that the council knew the problem was coming months ago and should have taken action then.

Under the proposal, which Mayor Wu - who sponsored the latest iteration - has to sign before sending it to Beacon Hill, the city would be allowed to set a commercial tax rate at 181.5% of the residential tax rate next year starting with bills going out in December, compared to the normal 175%. The rate would then decrease back to 175% over the following two years - with $15 million set aside in each three years to help small businesses, with less than 50 employees and $5 million in revenue, along with an increase in their exemptions for "personal property" - such as tables and barber seats.

The problem the measure seeks to address, at least temporarily, is that while residential property continues to show strong increases in values, commercial property, in particular large office buildings downtown, continues to shrink in value, in part because more workers now work at home instead of going downtown to work.

Under the state's taxing regulations - enacted after the passage of Proposition 2 1/2 in 1980, this means that residential owners would have to pick up a larger share of the city's overall spending burden, unless the legislature lets the city increase the commercial rate. At today's meeting, councilors said that even with the increase, owners of many commercial properties may still see an overall tax decrease, just not as much as they would get if the legislature rejects the proposal. Earlier this year, the state House approved a similar request from the city, with a longer time for the rate to shrink, but the state Senate rejected it.

Councilors acknowledged the measure is only a temporary fix, one that could ultimately still see residential property owners see ever growing tax burdens, but said the measure could buy time for home owners to adjust - and for the city to begin looking at ways to decrease its general reliance on property taxes, which currently make up about 71% of the city's revenue, compared to 55% the last time the city got permission to adjust its commercial rates, under the Menino administration.

"It's so important to stress that the 28% increase is still coming, it's just spread out of three years," Councilor John FitzGerald (Dorchester) said. "After this vote, let's not act like we've cleared a major hurdle."

But Councilor Sharon Durkan (Beacon Hill, Back Bay, Fenway and Mission Hill) praised Mayor Wu for finding a way to "cut the Gordian Knot" with a proposal that reduces the potential bite on homeowners while not overburdening office-building owners.

FitzGerald and other councilors vowed to continue to look at ways to diversify the city's revenue stream and, like councilors have routinely done for a couple decades now, warned non-profits they'll be looking at them to pick up their current voluntary payments in lieu of taxes.

"Harvard, BU, Northeastern, all these institutions get a pass," Councilor Julia Mejia (at large) said. "At some point the city's going to have to say you're going to have to pay if you want to do business in the city of Boston."

That was the one point that Mejia - who accused some councilors she did not name of whipping up fear among the elderly and other, poorer residents who have the most to fear from large property-tax increases - and Flynn agreed on.

Flynn said half the property in the city now belongs to non-profits, who don't pay taxes and that something needs to give.

But first, he charged that the council was rushing the vote and that accountability and transparency were more important. "No matter how tight deadlines are, we cannot simply adhere to the value of transparency only when convenient," he said.

Yet at the same time he admonished everybody else on the council of rushing things,he said the council knew things were coming to a head months ago and yet did nothing then to look at tightening city belts. Flynn said councilors in the spring and summer should have been looking at hiring freezes and even cutting spending outright. In July, though, Flynn called for increasing police hiring.

He repeated his call for a blue-ribbon commission to study ways to increase city revenues.

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Comments

Tax increases for everyone. Where are the budget cuts?

Have a great afternoon!

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I’ve no doubt that there’s fat that could/should be trimmed from the budget, but I bet everyone has a different opinion on just what’s worth sacrificing.

So I’m sincerely curious which parts of the city budget that directly make your life easier/safer/better should be cut and by how much?

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38

And they can increase them back and reduce residential exemptions on those of us who own under a million dollars in property when they get BPS to demonstrate they can educate students in every school. Also cut yellow bus transportation by 25% and go back to neighborhood schools. Also merge 30% of BPS schools. Charge residents an annual fee for parking stickers and also collect taxes from colleges and churges. Start with those items.

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so hydeparkish,

Which school is your kid in and which one should it merge with?

How many cars do you own and park on the street?

Which church (et al) do you attend and how much more would each member need to tithe in order to cover that cost?

How much money should Boston spend on the legal battle to get the reactionary Supreme Court to reverse over two centuries of law wrt the first amendment’s religion clause? (I’m down to see that happen, btw - but I think the upfront legal costs would dwarf the resulting revenue for years, if not decades.)

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We drive them since the bus takes so much longer , sometimes my daughter takes the mbta bus that is actually a much faster trip.

I would be in support of my kids school merging with the other closest BPS elementary school as long as they provided more specials than they do now - Art currently is provided vs Theatre, music and world language would be great

I don't park a car on the street but would be happy to pay $100 a year for a parking pass to help the city avoid raising taxes.

Churches and college that own land should pay taxes...not sure how that is debateable?

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it seems that none of the cuts you suggest would come at personal cost to you, and in fact that you’d only be willing to see your kids’ school be closed if it merged with one close by and added more classes - ie increased value to your family.

Can you suggest a budget cut that would require real sacrifice from you or the people you care most about?

Wrt churches and nonprofit schools - they’re exempt from property taxes in all 50 states. It’s PILOT programs that aren’t a given - ie up for debate (whether you or I feel it should be otherwise).

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Otherwise known as a win / win situation. BPS spends $1.4 BILLION which is a third of the cities budget, there are real savings to be found in the system that can be achieved while improving education for students.

I woukd pay for a parking sticker and reduce my residential exemption, I pay $4,000 a year for taxes which is a deal.

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Write us up a new FY2025 budget, with all the line items you're reducing highlighted clearly, and submit it to your councillor for a vote! I'm sure your definition of "pork" is totally isometric with everyone else's, and your new proposal will in no way harm the poorest and most vulnerable humans in our fair city, because you'll only be slashing the most obviously wasteful parts, which are clearly obvious to you but not to any of the dozens of people who make a career of this.

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Other cities such as Baltimore and Washington DC can improve there schools and make meaningful changes. But Boston refuses to try something different and BPS parents at the majority of schools are frustrated and want change.

Busing hasn't been working for the last 50 years and local schools make more sense as welling as being less expensive.

The poorest and most vulnernable students aren't getting what the deseve today, check out the Eliot School in the North end which is at a similar level to most private schools in terms of budget and services and then pick any other BPS elementary or middle school and they aren't close to equal.

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Please submit your plan for the next three years as commercial real estate continues to decrease.

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Stop sealioning. Put up or shut up.

cutting your local principal's salary would increase or decrease morale?

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How about the Climate Chief?

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Your sorry troll ass?

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How do I report this user?

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Since you've already had at least one account shut down, probably two.

Not sure how much savings that would entail, especially since the administration claims that office is budget-neutral.

But I’m curious, what benefit or advantage would you be personally sacrificing by removing that position? e.g. Do you live or own property in the Seaport or other neighborhood that looks likely to be heavily impacted by climate change and are willing to have the city forego any plans to address the issue - you’ll just handle it on your own?

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Office of Climate Resilience (OCR) is one of the offices in the Environment, Energy and Open Space (EEOS) Cabinet. I don't suggest to eliminate all of the cabinet or OCR. We can keep working people.

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When tax dollars are down. It won’t fall if you keep the budget even with last year.

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You still haven't answered. According to this report by the Boston Municipal Research Bureau: https://www.bmrb.org/wp-content/uploads/2024/04/RU41224Budget.pdf

The $4.64B operation budget represents a $344.0M increase from FY24, or an increase of 8.0%, driven by increased spending on Boston Public Schools, debt service, pension payments, and the creation of a new Planning Department.

So you can't cut debt service or pension payments. Are you going to cut schools, where the city's contribution increased (about 1.9% of the 8% increase) but the total school budget actually DECREASED due to ending of emergency aid, or the new planning department (only approx 1% of that 8% increase), which was an explicit promise Wu made during the campaign?

Not so easy, is it?

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Because I don’t agree with you? That’s not a troll even though you and your boomer friends think it is.

Ya, I already said cut the school budget. It decreased ever so slightly and at $30k per student with abysmal results is really embarrassing and pathetic.

What’s your plan for the next three years as commercial real estate continues to decrease? Just keep raising property taxes?

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You have been asked repeatedly what your proposal for budget cuts is an not ever answered that.

Trolls like to drown everything in bathtubs.

No, you're a troll because you keep pretending that 8% is discretionary and not basically mandatory this year driven by increased debt service, pension payments, (5.1%) the creation of a new Planning Department that you support (1%) + school payment increases (1.9%) to cover a shrinking school budget due to the loss of COVID funds

There's nothing you've offered that's realistic to cut this year that wouldn't cause major harm to the citizens of Boston. When cuts do come, I wouldn't look first to school children to shoulder the blame like you seem to want, but that's a different story.

Also you're a troll because of your meathead Trumper insults about people you disagree with being "on the dole" or then a "government employee" when you got called out. Real low effort MAGA stuff.

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You keep acting like the entire budget is mandatory. It’s not. If there are mandatory items that cause the budget to increase then guess what needs to happen? I’ll tell you because I don’t trust you can figure this one out yourself - you need to make reductions on other line items.

Reducing the cost per student from $30k to something more inline with the nation is going to cause major harm to citizens of Boston?! Lol. Just, lol

You think I’m a Trumper. You also think I’m from Florida. No idea where you got either of these ideas, but you can believe whatever you want if it makes you sleep at night. Pssst! Neither is, or has ever been true.

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But you had told us that you were constructing a massive house in Florida with all your money and expensive cars and moving in just three months. You couldn’t wait to leave. That was like three years ago.

Regarding your main point, it’s worth considering that “cost per student” encompasses the cost of the buildings used to house the students, which will undoubtedly be higher in areas with a higher COL. I’m not suggesting that there isn’t an issue, but “reducing the cost per student” is a largely meaningless platitude that does nothing to further the conversation.

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I never said Florida, ever. I’m significantly north of Florida with my gorgeous custom house and big ass garage to store all my expensive cars. I’d also like to note that we’re a data point for the millionaires tax since we moved out the year it went into effect and would have been hit by it. I’m still waiting to see those numbers since I know we were not the only couple who left. I still have property in Boston so that’s why I’m still here. Paying all those taxes for bike lanes and BPS.

The school budget for ‘25 is 1,526 million and takes up 33% of the budget. Enrollment is declining every year, yet the costs continue to rise and performance continues to get worse. There’s significant room for financial improvements here.

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I’m significantly north of Florida with my gorgeous custom house and big ass garage to store all my expensive cars.

Only a MAGA like yourself would make "jokes" like this and then attempt to insult those who call you out on your financial ignorance by saying they must be "on the dole".

You've finally moved the goalposts back from "the budget increased 8%, we should just keep it the same as last year when everything was fine," which you should've KNOWN was impossible even without the documentation I have given you.
Now you're saying, "there's significant room for financial improvements." Cool. So what do you cut this year, Florida man? The tax increases are temporary so it would have to be something immediate. Are you going to layoff some cops? Close several schools and fire teachers? Not pay debt service or pensions?

For living in your head. You’re obsessed…

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As the article points out, Flynn wants to increase the police budget but says he also wants to reduce the cities budget. That’s an easy and simplistic stance to take, reduce the budget on the things he doesn’t like anyway but not on the things he likes (and actually increase it).
We could reduce the police budget and eliminate city conscious travel reimbursement and parking spaces.

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Most of the councilors took they time they had available to speak to address the actual policy proposal that was before them. Councilor Mejia took the lion's share to talk about herself. What a gig to have

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why Ed Flynn still has a job?

Only Councilor Ed Flynn (South Boston, South End, Chinatown, Downtown) voted against, arguing both that the council was trying to pull a fast one over residents and businesses and that the council knew the problem was coming months ago and should have taken action then.

If only Ed knew someone on the City Council who could have acted on this months ago, we wouldn't be in this mess! Oh, cruel fate. Welp, for reasons I guess we'll never understand, we didn't do anything about this looming crisis a while ago, so now the problem is emergent, but I guess the Council doesn't deal with crises that are currently happening. Responding promptly to problems in the Council's jurisdiction, via public meetings and democratic process, is deceptive and harmful to residents, which I know is true because a very serious man in a a very serious suit told me so, We'd better just bury our heads in the sand and do nothing instead; it's the only responsible way to act.

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Hey lay off of Flynn. He's been very lonely since that meteor killed off all the other dinosaurs.