Worcester’s City Council voted 8-3 to raise the city’s commercial property tax rate Wednesday night, while lowering the residential property tax rate.
Fiscal 2021 commercial tax rates were set at $36.20 per $1,000 assessed valuation, and residential rates were set at $16.28 per $1,000 assessed valuation. The changes represent a $1.04 increase and 72 cent decrease per $1,000, respectively.
Worcester already had the highest commercial tax rate in Central Massachusetts before the increase, as it along with Hudson and Framingham are the only communities whose rates exceed $30 per $1,000 valuation.
Councilors agreed to reduce the city’s overall taxes by $1 million by tapping into the City Manager’s contingency account.
The decision to raise the commercial property tax rate ultimately hinged on concerns about raising residential property taxes while property valuations in the city have been increasing.
At-large Councilor Donna Colorio, specifically, expressed concern about tax increases impacting owners of two and three-family properties, who she said would likely pass those increases off to tenants by increasing rent prices.
At-large Councilor Morris Bergman referred to data indicating 40% of commercial properties in the city are valued at less than $250,000 with another 25% valued between $250,000 and $500,000, while the average commercial property in Worcester was valued just under $1 million. He reasoned that increases incurred by most commercial property owners would therefore not be as dramatic as they looked on paper.
“I don’t relish commercial property taxes going up, I don’t relish residential property taxes going up… none of us do… but I can’t in all good consciousness (sic) ask the two- and three-family property owners to pay more than half or two thirds of the commercial property owners in a tax increase,” Bergman said. “I just can’t justify that.”
At-large Councilor Kathleen Toomey, Mayor Joseph Petty and District 5 councilor Matthew Wally voted against the rate changes.
