City Watch-dog Group Seeks More Revenue From Businesses Boston Condos For Sale Ford Realty

I didn’t want to write about this because I’m not sure I understand it completely, but w/e. This is a blog, not a newspaper.

The city of Boston (and all municipalities in the Commonwealth?) taxes both business and resident property owners. The idea being, both groups benefit from the city’s services (fire protection, police protection, professional sports teams’ rallies).

But, it taxes the two types of property owners differently.

The Globe covered the issue recently in an article.

Under a policy called “tax classification”, business properties pay more than what they would owe, if properties of all types were taxed equally.

In Boston, the 2007 residential property tax rate is $10.99 per $1,000 of assessed value. The 2007 commercial property tax rate is $26.87 per $1,000 of assessed value. (Owner-occupants of residential properties get another $1,525 or so off their annual property tax bill … more about that, another time.)

So, previously, the property tax burden on businesses was 175 percent of the residential rate.

Then, in 2004, municipalities convinced the state legislature to raise that. It has been at 183 percent, most recently. (It may have been as high as 200 percent; I’m not clear on the history.)

Here’s the problem.

Under that law, the rate is supposed to drop back down.

Next year, it’s supposed to go back to 175 percent, then down to 170 percent.

Well, not everyone wants that to happen.

Municipalities, of course, since to have the rate go down, one of two things would have to happen: residential tax rates would have to increase, or cities would have to reduce their budgets.

Of course, municipalities (read: politicians) are loath to do either.

So now they’re pushing to rewrite the law, again.

The Boston Municipal Research Bureau is calling on the Legislature to change property tax laws so that the maximum ratio of residential taxes to business taxes in local communities will have a fixed ceiling.

The Boston Municipal Research Bureau wants to restore it to 175 percent, and keep it there, not reduce it, which was the original agreement.

Hmmm. The way I read this issue is, and I may be terribly misinformed on this, some people changed the rules, it hasn’t worked out for them, and now they want to change the rules, again.

Now, I don’t like paying property taxes any more than the next guy.

However, shouldn’t we start with the basic problem, before figuring out possible solutions?

The basic problem being, why does the city constantly outspend its budget? Why has the city’s budget increased by over 40%, over the past ten years? What does the city’s government have to show for it?

Group urges change on taxes – By April Simpson, The Boston Globe

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