Boston tax deal held up again
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Mayor Michelle Wu's deal with the business community to stop property taxes from spiking for Boston homeowners could be in jeopardy after a South Boston lawmaker threw the brakes on the proposal at the State House.
Why it matters: The city faces a potential budget crisis next year as commercial real estate and office space values drop in the work-from-home era.
- Over 70% of Boston's budget comes from homeowners who would feel the pain if rates increased to make up for dwindling commercial revenue.
- Wu made a deal with business leaders to raise commercial taxes and avoid the crunch on homeowners, but it needs approval from state lawmakers.
Driving the news: State Sen. Nick Collins (D-South Boston) delayed the vote on the tax bill until Thursday, potentially jeopardizing City Hall's ability to implement tax changes before January.
- Wu says she needs the bill passed by the Senate and signed into law by early December for city tax bills to be accurate.
- Collins said he delayed the vote to provide time to go over the city's finances.
What they're saying: "When making decisions that will have implications in the near term and for years to come, we need to be guided by the official data," Collins told the Globe in a statement.
Catch up quick: After months of negotiations, the bill was already held up once in the House when a suburban Republican lawmaker objected.
By the numbers: Under Wu's arrangement with business leaders, commercial properties will be taxed a maximum 181.5% of what residential taxpayers are charged in fiscal year 2025.
- The commercial rate would drop to 180% next year and 178% the year after.
- The city would spend up to $15 million annually helping small businesses cope with the hike and the personal property tax exemption for smaller companies would rise from $10,000 to $30,000.
What's next: The Senate will reconsider the bill Thursday, but any lone member could again derail its passage.
The bottom line: Wu's tax plan is stuck in legislative limbo and time is running out to prevent turmoil for Boston residents.