BOSTON MAYOR Michelle Wu and business groups ended a standoff and reached a deal on her property tax shift proposal.
Wu has sought to shift a larger share of the property tax burden over to commercial properties in order to ease a jump in taxes paid by residents. But business groups balked at the move, saying the sector is still in post-pandemic pain and dropping property values due to the rise of remote work.
Business groups last week backed off their push for cuts in City Hall spending, and agreed to the idea of a property tax shift. Wu, who first proposed the shift in April, modified her proposal, shrinking down the size of the shift and reducing it from happening over five years to three.
The deal, announced Wednesday, has the temporary tax shift ending after three years. The maximum shift, as it’s called, would be 181.5 percent in fiscal year 2025, then moving to 180 percent in fiscal 2026, and 178 percent in fiscal year 2027.
An earlier version of the tax shift cleared the City Council and, after additional negotiations, cleared the House. But Wu’s proposal was blocked in the Senate, where Senate President Karen Spilka said the final proposal needed the business community’s sign-off.
Over the weekend, the two sides were a half percent apart. Jim Rooney, the Greater Boston Chamber of Commerce CEO, called 181.5 percent the business groups’ “final” offer.
The deal reached Wednesday also authorizes city officials to appropriate up to $15 million in each year to cushion potential hits to small businesses due to the shift. The personal property tax exemption for small businesses would also be increased to $30,000 from $10,000.
The deal requires a new home rule petition to make its way through the City Council and Beacon Hill. The clock is ticking on getting the new legislation approved, since tax rates must be approved by the City Council in November, and bills go out to taxpayers by January.
The leaders of the business groups involved in the negotiations included Greater Boston Chamber of Commerce CEO Jim Rooney; Tamara Small of NAIOP Massachusetts; Marty Walz, the interim president of the Boston Municipal Research Bureau; and Doug Howgate, the president of the Massachusetts Taxpayers Foundation.
The post Deal reached on Wu’s property tax shift appeared first on CommonWealth Beacon.