Mayor and Councilor-at-Large Joseph Petty said the City’s lower rate increases this year in comparison to cities like Boston and Cambridge will help drive business activity west.
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The Worcester City Council conducted its annual vote to decide the property tax rate on Tuesday, voting to set the fiscal 2026 rates of $29.06 per $1,000 of assessed value for commercial properties and $13.28 per $1,000 of assessed value for residential properties.
The new rate will lead to an average commercial tax bill of $37,602, an increase of $1,395 from fiscal 2025. The new residential rate will lead to an average bill of $5,446, an increase of $180.
The rate was the lowest residential rate and the highest commercial rate of the 269 options presented to the council. The residential rate is nine cents higher than the 2025 rate, while the commercial rate is 46 cents higher.
Mayor and Councilor-at-Large Joseph Petty said the City’s lower rate increases this year in comparison to cities like Boston and Cambridge will help drive business activity west to Worcester.
“This is our chance to capture some of the developers and some of these businesses when it’s getting too expensive out in Boston,” Petty said.
[RELATED: Taxes in Worcester: Businesses are the top tax contributors to the City, but exemptions and the dual rates are leading to calls for reform]
District 3 Councilor George Russell said a uniform tax rate for residential and commercial properties, often called for by the Worcester Regional Chamber of Commerce and other business interests, would drive up the tax bill for a single-family home by 30%. Russell called on the council to consider tax exemptions for small businesses instead.
“In the 14 years I’ve been on this council floor, I’ve had various members of the business community come and say ‘oh, the poor small businesses,’ but not one of them has ever said ‘let’s adopt the small business tax exemption.’” Russell said. “Let’s all get on the same team. Let’s adopt that in the future.”
During the discussion over the tax rate, Councilor-at-Large Moe Bergman said he wants to introduce a proposal in the coming weeks that would call for residential buildings with nine or more units to be taxed under the commercial rate.
Bergman said this move would allow for the collection of an additional $18 million for the City.
“If you have nine-or-more units, you’re not likely to be owner occupied, you’re likely to be running that as a business,” Bergman said.
The vote to select the rates of $29.06 for commercial properties and $13.28 for residential was unanimous, after another proposal by Councilor-at-Large Kathleen Toomey to set the rates at $13.30 for residential properties and $28.98 for commercial properties was voted down 3-7, with councilors Petty, Toomey, and Pacillo voting in favor.
Eric Casey is the managing editor at Worcester Business Journal, who primarily covers the manufacturing and real estate industries.
