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Boston City Council could vote Wednesday on request for temporary increase in taxes on commercial property

In an emergency Zoom meeting this morning, the City Council agreed to hold a public hearing before voting on a proposal to potentially increase taxes on commercial properties over a three-year period to help cushion the blow on residential property owners from expected large decreases in the value of downtown office buildings because many have higher vacancy rates as a higher percentage of workers continue to stay home in the aftermath of Covid-19.

The vote to formally refer the issue to a council committee means the council could possibly vote Wednesday on what would be a home-rule petition asking the state legislature and the governor to let Boston adjust its commercial tax rate.

Councilor Gabriela Coletta Zapata (East Boston, North End, Charlestown), who chairs the committee on government operations, which will hold the hearing, told colleagues she will hold a public hearing to let residents have their say. Although she did not specify a date for that hearing, to get it voted on on Wednesday, and to comply with a 48-hour notice requirement under the state open-meeting law, she would have to hold the hearing on Tuesday.

That did not sit well with Councilor Ed Flynn (South Boston, South End, Chinatown, Downtown), who has opposed the temporary increase, anyway. Flynn called for a series of public hearings across Boston neighborhoods to really let residents have their say, a process that could take weeks. But otherwise, he said, his opinion is that "it's almost as if we're a rubber stamp and we're trying to get this out Wednesday afternoon," he said. "Is that inaccurate?" he asked Council President Ruthzee Louijeune.

Louijeune declined to get into a debate with him on that issue, only agreeing with him that that was his opinion.

The council actually voted in June to approve a measure under which commercial property could be taxed at a higher rate than normally allowed under state regulations, and the measure went to the legislature, where the house approved it but the senate sat on it.

The city has to submit an entirely new request because that measure would have allowed a higher rate and to let it gradually return to normal rates over five years instead of the lower rate and three-year sunset clause agreed to last weekend by Mayor Wu and some owners of big city businesses and commercial buildings. The new measure also would commit the city to using $15 million a year while it's in effect to provide tax breaks for smaller business owners in the city - and allow them to exempt a higher percentage of their "personal property" from taxes.

City officials, including Louijeune, say time is of the essence because the measure has to be approved by the legislature and signed by the governor in time for the city to formally set new tax rates in November - in time for bills reflecting the new rates to start going out in January. Officials say the measure will not stop anticipated increases in residential tax bills, but will reduce the amount.

Today's meeting seemed like it would be a brief session. Louijeune called the meeting to order, councilors formally voted unanimously in a roll-call vote to hold the meeting, voted unanimously to refer the issue to Coletta Zapata's committee for a hearing, then voted unanimously, again in a roll call, to adjourn all with no discussion, save for Flynn asking to raise a "point of order" before he voted to adjourn, which Louijeune said she would allow him to raise after the vote was taken, because once a roll-call vote starts, there's no stopping it.

Flynn made his point, points actually, and then councilors Erin Murphy, Julia Mejia and John FitzGerald raised questions. Because council meetings are only formally adjourned when the president says "this meeting is adjourned," not when the last roll-call vote is tallied, and Louijeune had not actually uttered that phrase, she allowed them to speak.

Murphy said she wanted to make sure the council have a chance to weigh in and consider the issue. She said it seems like a lot of other people in the city have have "the pleasure of the opportunity to be really involved in this, but we on the council have not been."

FitzGerald asked Coletta Zapata if the hearing could include "panels" - groups of several people called up to testify on the matter - to ensure that both sides of the issue could be aired. Coletta Zapata said her intent is to old a hearing and to allow for public testimony, but that she had not yet decided on the format.

Mejia said the fact that Flynn was asking about hearings got her worried - she thought referring something to committee meant a public hearing.

"It makes absolutely no sense that Councilor Flynn is asking whether or not we're going to have a hearing," she said. "I didn't walk in here with any fear and I don't want to walk out of here with any fear."

Coletta Zapata said her intent was always to have a hearing. "This is an important matter to all of us and to the city of Boston," and it's vital to provide a space for residents to be heard, she said.

As what was turning into a debate about the issue and the public and meetings, Councilor Tania Fernandes Anderson (Roxbury) expressed some irritation: If her colleagues had wanted to have a discussion, they should have voted "no" on adjournment to begin with. She then said she wanted to rescind her vote to adjourn, made that in the form of a motion and the council held a second vote on whether to adjourn.

The council then voted 7-6 to adjourn - Breadon, Coletta Zapata, Durkan, FitzGerald, Pepén, Santana, and Weber voted to adjourn; Fernandes Anderson, Flynn, Louijeune, Mejia, Murphy and Worrell voted to keep talking. Louijeune then declared the meeting adjourned.

Mayor's request for a home-rule petition (1.4M PDF).

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Comments

The lower valuations are due in part to remote work but also to lower values of all commercial properties due to higher interest rates (as almost all buildings require significant debt to acquire or refinance). Even if all were full with happy commuters they would be valued much lower.

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Make Harvard pay their PILOTs, including the arrears. We'd be swimming in cash and they'd never even notice it.

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bizarre notion that the elites somehow are for our benefit.

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bizarre notion that Harvard should remain exempt from paying anything on the valuable property they own, even the paltry PILOT payments the city asks for?

https://www.thecrimson.com/article/2022/10/20/editorial-pilot-payments-1...

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BU, NU,Suffolk......

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… of the ordinary people, and in particular the poor, existing for the benefit of and exploitation by the elites right on its head, doesn’t it.

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Make houses of worship too. The targeting by the city of certain non profits pay but not others is not the way. It should be evenly applied. Its a % so it wealthier non profits would pay much more and smaller very little.

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Especially with the current Supreme Court, applying it to houses of worship would be struck down quickly.

As a practical matter, a bill that exempts religious institutions has a better chance of becoming law.

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Council President Louijeune is so level headed in these contentious meetings. Most everyone on the council seem to have conflicting agenda. Hard to follow what the endgame for Ed Flynn is beyond a dream to be Mayor.

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Stating we’re in this situation because we lost Covid money, every municipality in county is out of that money. This is a result of a bloated budget and a mayor who refuses to make any cuts.

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You are assuming that other cities aren't experiencing, or about to experience, the same thing.

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Hopefully they don’t handle it by increasing their budgets.

We knew this was coming BEFORE the mayor pushed for a budget increase.

People need to stop acting shocked and just admit this is a failure attributed to the person running the city, and not Covid money running dry which Adam continues to cite as the driving factor.

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When did Boston get its last Covid funding, 2021? Maybe 2022.

No longer an excuse for poor leadership and planning.

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While Boston may have spending problems too, we are more dependent on commercial property tax revenue than most peer cities are. This is because some time back, we elected to have a much higher rate on commercial property than residential, so we end up more exposed to commercial values than normal.

Since values went straight up almost without interruption for 25 years, this worked out fine, but it was always a risk because commercial values generally are more volatile, and tend to crater during recessions. Tommy and Marty got lucky, and Michelle didn't.

Of course, this "solution" just kicks the can down the road, and if property values don't bounce back as expected (due to whatever combo of reduced demand/higher rates), then things are gonna get spicy real fast.

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I can't remember the exact percentage, but Boston has a truly ridiculous amount of tax-exempt property. Federal/state/city governments, churches, educational institutions--none of them pay taxes and most of them don't bother with PILOTs either. I picked on Harvard because they're so obvious, but they're not the only ones who really ought to be pulling their weight.

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They could pay $2B in taxes right now and it would change nothing in Boston.

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Medical School, Dental School, playing fields, stadium, libraries, etc.

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I mean, maybe you're a troll who lives in Florida, but most people who live in this state know Harvard owns more property in Boston than they do in Cambridge.

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Don’t quit your government job. You’ll never make it in the private sector.

“Harvard's status as a nonprofit means it can avoid levies on $4 billion worth of buildings and land in Boston and $8.7 billion in Cambridge that aren't subject to property taxes, according to an analysis of the school's real estate portfolio by Bloomberg News.”

https://www.bloomberg.com/graphics/2024-harvard-property-tax/#

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Harvard has more land in boston than Cambridge, it may not be worth as much, but that's the fact. Regardless, my unserious florida friend, your statement was that Harvard owes nothing to Boston. My background in mathematics And long experience in the private sector tells me that taxes on 4 billion is a lot more than nothing.

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But holy cow you moved them across state lines! Your back must be sore from all that heavy lifting.

Regardless, your point is that you were right in that Harvard owns more land in Boston than Cambridge albeit at a lower value when the topic of discussion is Harvard not paying property tax? Lol, sure thing pal!

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out of town troll is trolling poorly. Maybe you need a reboot?
At least you finally learned that Harvard owns a huge chunk of Boston that it doesn't pay taxes on. Great job, Florida man.

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What the hell is she talking about? Shouldn't she have all the processes, procedures, rules, etc. down pat by now?

'Mejia said the fact that Flynn was asking about hearings got her worried - she thought referring something to committee meant a public hearing.

"It makes absolutely no sense that Councilor Flynn is asking whether or not we're going to have a hearing," she said. "I didn't walk in here with any fear and I don't want to walk out of here with any fear."

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Voting closed 27