Editorial: Recipe For Reinvention
If the City of Worcester is to reinvent itself, if it is to become the city that so many of its politicians say they and their constituents want it to become, it must clean out the clutter of the past rather than insist upon building on top of it.
The nearly 30-year-old piece of clutter that presents the biggest obstacle to Worcester’s rebirth is the dual tax rate, which Mayor Joseph O’Brien and the 36-member Task Force on Job Growth and Business Retention that he convened in April has suggested phasing out.
O’Brien and the task force deserve a lot of credit for showing the kind of political will required to get rid of the dual tax rate or at least narrow the gap between the city’s residential property rate of $15.15 and the commercial/industrial property rate of $33.28.
Not only did the task force have the courage to recommend a more fair and equitable tax structure for the city, it recommends making the needed changes relatively quickly. In its report issued last week, the task force provides examples for how the city could bring all property owners to a $19.01 rate within three years, closing the tax gap completely.
It also offers a scenario in which the gap is closed by 50 percent over three years, resulting in a residential rate of $17.08 and a commercial/industrial rate of $26.15.
This isn’t to argue that residential property owners in Worcester don’t pay their fair share. In fact, it’s quite the opposite. While residential ratepayers pay as little as is legally permissible, they shoulder more than 80 percent of the city’s total assessment. When the dual-rate strategy was adopted in 1984, residential property owners paid about 65 percent of the city’s total assessments.
The total assessed value of commercial/industrial property has decreased from 35 percent to just 19 percent over the same time — and the pain doesn’t end there.
Businesses pay personal property tax at the commercial/residential rate. For a city with such high hopes for the development of very equipment-intensive industries like biotechnology, pharmaceuticals and manufacturing, that situation is untenable.
New Thinking
In the past, it may have been difficult for city politicians to explain to residents that they provide too great a proportion of the city’s tax revenue while also paying too few dollars. Now, we’re more inclined to believe that residential property owners and city councilors who fight tooth and nail against making the city’s tax rates more equitable are practicing willful blindness.
Along with the phasing out of the dual tax rate, the task force has recommended that the city council “better utilize” an exemption program that requires no action by the state legislature and provides a tax break of up to 20 percent to qualified owner-occupied property owners. This incentive would balance out much of any increase that the single rate adjustment would cause residential owners.
The promotion of a fair and equitable tax system is just one part of the task force’s impressive, 30-plus page report, which also makes recommendations with regard to municipal staffing and organization, business incentives and the branding and marketing of the city.
If the 36-member task force can make these aggressive, forward-looking recommendations after just four months, we see no reason why the city council should not adopt a similarly aggressive timetable for making them a reality.
When Worcester adopted the dual tax rate in 1984, cities all over New England were searching for ways to salvage tax revenue as commercial and industrial property owners were fleeing to lower-cost locales.
Worcester, we would argue, is in a better position now.
Its leaders must begin governing with confidence and forthrightness. The pieces are in place. City Manager Michael O’Brien, Mayor Joseph O’Brien and the city’s thin economic development department are doing all they can.
Now, it’s the city council’s turn to do the hard work, and to tackle the needed reforms to Worcester’s tax base that has become such a burden on business, and an obstacle to stopping the slide of commercial and industrial investment in the city.
WBJ Web Partners
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