Small businesses need a break.
Small businesses need a break.
The tumult in the regional and national economies has hit all industries and businesses differently, but rising costs and workforce shortages have fallen disproportionately on small businesses. Just in Worcester alone, high-profile businesses like The Queen’s Cup bakery, the Maker to Main grocery store, Redemption Rocking Brewing, and restaurants Lock 50 and Flying Rhino have closed since 2024.
Not helping those small businesses in their effort to survive is the high cost of doing business. In Worcester, those costs include a sky-high commercial property tax rate, which small businesses pay either directly or indirectly through their leases. At $29.06 per $1,000 in property valuation, Worcester’s tax rate is the highest in Central Mass. and the eighth highest in the entire state, even outpacing Boston. To make a small dent in this problem, former Worcester City Councilor George Russell suggests the City of Worcester adopt a little-used state law allowing for a 10% property tax exemption for buildings with small businesses, as WBJ Managing Editor Eric Casey writes in his “
Tax breaks for small businesses?” story.
Every municipality in Central Massachusetts should take a hard look at heeding Russell’s advice, especially those 17 communities like Worcester, Marlborough, Framingham, Milford, and Clinton with a split-tax rate where commercial property owners shoulder a disproportionately higher burden. Typically, whenever local governments give out property tax breaks to businesses, they award multi-million dollar TIFs to very large businesses and new companies/developers with the resources to request a significant deal. By offering a uniform tax break to small businesses, communities can help homegrown entrepreneurs and family businesses stay competitive, with the hope they can invest further in the local economy. Moreover, the tax break would encourage commercial landlords to seek out small businesses for vacancies.
Auburn and Berlin are the only two Central Mass. municipalities that have already adopted the small business tax break, and they should be lauded for their efforts. Auburn is going through the legal process to offer the tax break to more businesses, by raising the property size and employment count thresholds that businesses need to qualify. The standard tax break of 10% offered through the state law only equates to a few thousand dollars, but communities have the option to offer more. Places like Worcester with onerous commercial tax rates should look in the 15% range.
More than any cost savings, communities send a message: Small businesses are welcome here, and we want to see them succeed. That’s a message every community can get on board with.
This Editorial is the opinion of the WBJ Editorial Board.
