Worcester Proposal: Shop Down Your Tax Bill Balance
Think of it as Groupon for property taxes.
Worcester, a city that has dabbled rather extensively with daily-deal-style promotions at local businesses through its Woo Card program, is considering taking that model to another level.
Unlike the Woo Card, in which businesses offer discounts in exchange for advertising and potentially greater customer volumes, the idea proposed by City Councilor Frederick Rushton last month would apply those discounts directly to the customer's property tax bill.
Sound unique? That's because it is. Only one other community is known to have created such a program: Marlboro Township, N.J. And that's where Rushton got the idea. His old college roommate lives near Marlboro and is friends with its mayor, Jonathan Hornik.
"I think we can show pride in our city and at the same time save money on our property taxes," Rushton said. "That's a win-win for everybody."
How It Would Work
A customer who signs up for the program would swipe the card he or she is issued when purchasing food or other goods at a local business that has signed up to offer discounts.
The customer would pay full price, but the discount — perhaps 5 or 10 percent — would be credited to the card. A third-party payment processor would transfer the money to a bank and the city's coffers, so that the discount could be applied directly to the customer's property tax balance.
In a telephone interview, Hornik said his city's program has been "an unmitigated success" with close to 2,000 users in his town of 40,000.
"Our residents enjoy getting the discount on their taxes and the stores are seeing an increased volume of business," Hornik said. "I've saved $300 off my own tax bill."
Rushton said he and several city officials, as well as others, had a conference call with Marlboro's deputy mayor to discuss how the program — Shop Marlboro — works.
Hornik said his town worked with a payment processor for more than a year to get the arrangement just right.
"It's very similar to the way mortgage servicers pay property taxes from an escrow account," he said.
In Marlboro Township, a local bank donated the cards and Hornik said the cost of paying the payment processor is minimal.
Rushton said he has spoken to some Worcester banks who expressed interest in donating the cards and participating in the program.
"They get their logo on the card itself and build their brand," Rushton said. "Secondly, the money needs to be parked somewhere, and I'm sure banks like having money sitting in their accounts."
Rushton sees potential synergies between the proposed program and the Woo Card program, which is run by the city's cultural commission and charges an annual fee to participating businesses. Currently, 63 businesses in the greater Worcester area participate in the program.
Ted Domville, owner of Wooberry on Highland Street, called Rushton's proposal "an interesting idea" and said he would likely consider signing up.
"We've had a lot of success with the Woo Card," Domville said.
Domville prefers more direct marketing efforts like the Woo Card or even targeted Facebook advertising to daily- deal websites like Groupon, which takes half of every coupon it sells.
He thinks the city should try to integrate with the Woo Card any property tax incentive program that results.
"The Woo Card has a fair number of card holders at this point," he said. "It'd be wasteful to start back at zero."
What About Renters?
One demographic Domville sees a lot of is the college crowd. And it's likely that just about all of them don't own property.
While Rushton is proposing only a property tax incentive, he said it's possible the program could accommodate renters at some point, perhaps through direct cash payments to the renter.
He said he has also thought about discounts on other types of taxes, like water or sewer bills.
Hornik said officials in his town have discussed what they might be able to do to accommodate renters. He said an arrangement with landlords might be complicated.
"Maybe that's the next generation of this," he said. "We're really trying to get this right."
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