The Worcester Regional Chamber of Commerce has argued reducing the gap between commercial/industrial/personal tax rates and residential tax rates will lead to a fair and equitable system.
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As we approach the year’s end, residents and businesses again prepare for the continued debate at Worcester City Hall over the city’s dual tax rate. Since fiscal 2015, the majority of the City Council has voted to increase the total tax bills on commercial and industrial property owners while lowering the residential tax rate over the same period. The Worcester Regional Chamber of Commerce has argued reducing the gap between commercial/industrial/personal tax rates and residential tax rates will lead to a fair and equitable system. Moreover, it will grow the commercial/industrial workforce and tax base, creating good-paying jobs for residents and revenue for city services.
Of 351 municipalities in the commonwealth, just 91 still utilize a dual tax rate. Worcester’s commercial/industrial tax rate is double at least seven towns surrounding it, as those towns boast pad-ready sites for companies looking to relocate.
Surrounding communities are putting themselves in the best position to broaden their tax bases. Webster moved to a single rate in 2018, understanding keeping businesses in their town and attracting new ones will expand its tax base, which will lower both the business and residential taxes.
In November in Auburn, the town selectmen again voted unanimously to narrow the gap toward a single rate. Fitchburg and Clinton are following suit, understanding the continued vote in Worcester to widen dual tax rate is contributing to companies leaving Worcester. In August, construction began on a $45-million development project for Olympus Corp. in Westborough. The 150,000-square-foot building is set to be completed in the first quarter. Christopher Egan, president of Carruth Capital LLC who is performing the construction, said, “Olympus picked the site because Westborough has a fair single-tax rate.”
This is a continued trend Worcester has seen over the past few years. When Primetals Technologies Ltd. (formerly Morgan Construction Co.) wanted to expand in Worcester after a 100-plus year presence in the city, there were scant pre-permitted pad-ready sites available. Primetals, and its 275 jobs, departed Worcester in 2018 for a renovated 183,000-square-foot site, paying a $16.52 per $1,000 assessed tax rate in Sutton.
Councilors have pointed to Worcester's TIF deals as an incentive to attract or retain businesses. While the chamber is supportive of TIFs, only a handful of businesses have utilized the program given the limits, challenges and costs of pursuing a TIF agreement. The city has only 17 active TIF agreements. This represents 0.18% of the total number of businesses in the city. Moreover, only three TIF agreements have been approved since 2015.
In this past election, Worcester candidates ran on supporting the lowest residential tax, so businesses must brace for another increase. Councilors who argue people need these breaks forget those same people need good-paying jobs. Having 700 manufacturing jobs leave the city in recent years is counterproductive and goes against their argument.
Alex Guardiola is the Worcester Regional Chamber of Commerce director of government affairs and public policy.
