Editorial: Worcester needs to move toward a single tax rate
Commercial property owners in Worcester pay a higher tax rate than those in any other Central Massachusetts city or town. The rate of $30.04 per $1,000 of assessed property value is the only one in the region higher than $30. Worcester’s commercial tax rate is even higher than Boston’s $25.27 rate.
The City of Worcester needs to reform its property tax structure now, by starting the process of eliminating the dual rate where residential property owners pay only $13.75, less than half the commercial rate. When the City Council on Dec. 10 goes to vote on the 2025 tax rates, they are in a position to lower the tax rate for both residential and commercial property owners, but the commercial rate should be cut by more, lessening the massive gap opened over the last four decades.
The Worcester Regional Chamber of Commerce has been spearheading the campaign for a single tax rate for more than 10 years now, but it has had little success in getting the City Council to get onboard with the plan, even though a single tax rate has obvious benefits for both businesses and the residential property owners.
As the chamber points out, in 1984 when Worcester implemented its dual tax rate, 45% of taxes were levied on commercial property owners. However, as the gap between the commercial and residential tax rates grew, business owners were disincentivized from investing in their properties. Many left for neighboring communities, and some to states with lower tax rates. Today, only 36% of the City’s tax revenue comes from commercial property owners, a drop made more stunning considering their tax rate is now more than twice the residential rate.
This strongly suggests the dual tax rate experiment, rather than lightening the tax load on residents, has actually put more of that tax burden on residential properties.
In order to attract businesses to build or move here, the City of Worcester must rely on providing tax breaks to individual companies. However, these tax breaks tend to only go to larger organizations with the scale and resources to advocate for a better deal. As a result, the burden for that larger business’ tax break falls on all the other taxpayers in Worcester, including residential property owners and small businesses.
The aftermath of the 1984 Massachusetts law allowing for dual tax rates led to an explosion of communities enacting separate rates for commercial and residential. Over the years, local governments have realized this is bad policy for both businesses and residents, and many have reformed their tax structures. Fitchburg, for example, switched back to a single tax rate in 2020 after years of narrowing the gap between the two rates. Today, only 11 communities in Central Massachusetts have a dual tax rate, and none of them have warped the commercial/residential rates to the degree Worcester has.
Adding more than 20,000 residents the city over the last decade is great, but if the Worcester City Council is serious about creating a thriving city where businesses can grow and the government has enough money to cover all the necessary services for those in need, the councilors need to start moving toward a single tax rate.
This editorial is the opinion of the WBJ Editorial Board.
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