Boston Mayor's Commercial Property Tax Hike Plan Faces Business Backlash

Boston Mayor Michelle Wu proposes an 8% increase in commercial property tax rates to shift the tax burden from homeowners and renters. The Greater Boston Chamber of Commerce opposes the plan, citing concerns about the city's competitiveness and the impact on businesses.

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Boston Mayor's Commercial Property Tax Hike Plan Faces Business Backlash

Boston Mayor's Commercial Property Tax Hike Plan Faces Business Backlash

Boston Mayor Michelle Wu's proposal to increase the commercial property tax rate by 8% is facing strong opposition from the Greater Boston Chamber of Commerce. The chamber argues the tax hike, coupled with Wu's proposed 8% increase in city spending, will hurt Boston's competitiveness, particularly in a post-pandemic world where remote work is becoming more prevalent.

Why this matters: The outcome of this debate will have significant implications for Boston's economic competitiveness and its ability to attract businesses and talent in the post-pandemic era. If the tax hike is implemented, it could lead to a ripple effect, influencing other cities and states to reassess their own tax policies and potentially impacting the national economy.

Wu's plan aims to shift more of Boston's tax burden onto commercial properties to avoid a big hike on homeowners and renters. Currently, owners of commercial property in Boston pay a tax rate that's 2.5 times higher than what owners of residential property pay. Wu's plan could push that multiple closer to three times.

In a sharply worded letter to the City Council, Greater Boston Chamber of Commerce CEO Jim Rooney slammed Wu's plan. "The bottom line from chamber CEO Jim Rooney: Pare back the 8 percent increase in spending Wu has suggested for Boston's next fiscal year before imposing a rate hike on commercial real estate," Rooney wrote. "No one is calling for massive cuts. But many chamber members were not happy to see Wu's tax plan emerge within days of an 8 percent budget increase. That combination was frankly head-scratching to some people."

Local business leaders fear that Greater Boston is losing its competitive edge, and the tax hike will exacerbate this issue. If Wu's effort fails, residential tax bills could rise 16.5% in early 2025, which is an election year in Boston. City officials say residential tax bills have risen 9% a year on average for the past five years.

Wu still needs City Council approval for her plan, which is no sure thing, with a second hearing planned for May 30. She also needs the House and Senate to go along, as well as Governor Maura Healey's approval. The debate over Boston's tax rates and spending comes as the city faces pressure to remain economically competitive while also addressing issues like housing affordability and infrastructure needs in the wake of the COVID-19 pandemic.

Key Takeaways

  • Boston Mayor Michelle Wu proposes 8% commercial property tax rate hike.
  • Greater Boston Chamber of Commerce opposes the hike, citing competitiveness concerns.
  • Wu's plan aims to shift tax burden from homeowners to commercial properties.
  • Chamber CEO Jim Rooney wants spending cuts before tax rate hike.
  • City Council, state legislature, and Governor's approval needed for plan to pass.