This election, there’s more on Worcester voters’ ballots than candidate races and statewide referendum amendments.
Ballot Question 5 asks Worcester residents whether they support a 1.5% surcharge on their property taxes. As part of the Massachusetts Community Preservation Act, the city of Worcester would use the surcharge revenue for projects that create and preserve open space, recreational land and community housing.
The majority of Massachusetts municipalities have already chosen to participate in the Community Preservation Act, an optional statewide program. Under state law, cities and towns that want to join the program must do so by ballot measure. In addition to the local surcharge, participating municipalities receive money from the state for CPA projects.
Although Worcester currently isn’t involved in the CPA, the city still helps fund it when residents pay state fees on real estate transactions and municipal lien certificates. According to a report by the Worcester Regional Research Bureau, a local nonpartisan nonprofit, Worcester property owners have contributed more than $1 million in fee payments to the CPA program each of the last three years.
“So essentially ... the money is flowing out of Worcester and going into over half the commonwealth, but not here,” said Paul Matthews, CEO of the research bureau.
In order to change that and access some of the money in the state pool, Worcester voters need to approve the surcharge on their property taxes. While supporters say that’s a sensible move, opponents are concerned the surcharge could squeeze local businesses.
How the Community Preservation Act would work in Worcester
Boston and Springfield — Massachusetts’ two other largest cities — are among the 189 municipalities that currently participate in the CPA. Each year, the revenue from a municipality’s tax surcharge goes into a local trust fund before the state matches a portion of the revenue. The CPA has contributed about $815 million to its participating communities since the state created the program in 2000, according to the bureau’s report.
Localities must use the money from the state match and surcharge revenue for community preservation projects. The CPA gives cities and towns flexibility to choose the amount of the tax surcharge, up to 3%. While 75 participating communities have agreed to a 3% surcharge, Worcester would join 40 others in imposing just a 1.5% tax.
If Worcester voters approve the CPA, the city will have to create a committee that will recommend how the funds be used. The Worcester City Council will have final authority on the spending decisions.
Matthews said it’s difficult to estimate how much money Worcester would generate each year from the program if voters approve it. However, he noted that Springfield receives about $1.6 million annually from the CPA surcharge and state contribution. Worcester, as the state’s second-largest city, should access more money than Springfield and other mid-sized cities, the bureau said.
How much will your surcharge be?
If Worcester’s residents vote “yes” to participating in the Community Preservation Act, the amount of tax surcharge they’ll pay will depend on their property value.
According to the research bureau report, the median residential property owner in Worcester would pay an annual surcharge of $43.46 while the median commercial property owner would owe $174.23 a year.
The city would exempt the first $100,000 of residential and commercial property value from the surcharge. Low-income families and low- to moderate-income senior residents who own homes also would not have to pay the surcharge.
The Worcester Regional Research Bureau did not take a position on the CPA. However, it created this online tool that helps property owners calculate how much their surcharge may be.
What do supporters say?
Worcester supporters of the Community Preservation Act argue the city should start taking advantage of a program residents already help pay for. The program would create a guaranteed long-term funding stream for projects the city can’t always afford — like rehabilitating old historical buildings, creating new parks, protecting existing greenspace and water bodies, and building more affordable housing.
“It is an amazing range,” said Ann Lisi, a member of the Yes for a Better Worcester coalition, which supports the CPA. “These are already the strategic priorities of the city.”
City officials and housing advocates have already expressed interest in using the CPA money to help finance a new affordable housing trust fund. Although Worcester has allocated $15 million for the fund, city officials say they’re still looking for more money to sustain it.
“For everything from kids’ success in school to attracting workers to keeping young people here, you’ve got to do something to intervene on what is just runaway housing costs,” Lisi said.
What do opponents say?
The Worcester Regional Chamber of Commerce supports the initiatives the CPA would pay for. But Alex Guardiola, the chamber’s vice president for government affairs and public policy, said the group opposes joining the program due to concerns about the tax surcharge.
Worcester has the eighth-highest commercial tax rate in the state. Although the annual surcharge for a property owner would be a small portion of their overall property tax bill, Guardiola said the extra fee could still be significant for some companies. He noted that even businesses which lease property could face the surcharge if their landlords require them to pay taxes on the space.
“Instead of actually trying to help [businesses] stay here and employ city residents, what you're doing is just saying, ‘Hey, we're going to add more [taxes],’” he said, noting that some companies have already left Worcester for other communities with lower tax rates.
If Worcester residents vote in favor of the CPA, the tax surcharge wouldn’t kick in until at least July 2023. Still, Guardiola suggested the city wait until inflation declines and economic conditions improve before joining the program.
In the meantime, he said Worcester officials can fund community preservation and affordable housing projects using American Rescue Plan Act money from the federal government. Worcester must use up the ARPA funds by the end of 2026.
