The Boston City Council approved Mayor Michelle Wu’s newly revised property tax proposal Wednesday, giving the measure a rare second chance to gain Beacon Hill’s blessing.
Mayor Wu refiled the measure last week. It is intended to avoid budget cuts and spare Boston’s homeowners from a sharp increase in their property taxes by temporarily taxing business properties past the legal limit. The first version stalled in the legislature amid disagreement between the mayor and the business community over its duration and tax rate ceiling. The revised version would allow the city to tax businesses at a lower ceiling and for a shorter time than Wu initially sought.
The revised measure passed the council on a 12-1 vote – a margin that represents more consensus than the 8-4 vote that advanced the original measure back in June. South Boston Councilor Ed Flynn was the lone remaining vote against the new version Wednesday.
“We should have listened to fiscal watchdog groups and experts to compromise months ago before waiting until the 11th hour,” he said. “We could have done more to compromise by cutting spending and tightening our belts.”
Flynn, who has publicly indicated a potential campaign for mayor, pointed to the larger looming problem of Boston’s heavy reliance on property taxes to pay its bills.
“We have falling commercial property values due to remote work policies that studies show may cost us $500 million per year. Our budget is now over 70% reliant on property taxes, and 50% of our land is absorbed by large nonprofit partners in the pilot program, which are non-taxable entities that continue to expand,” he said. “That is simply [an] unsustainable formula.”
Despite Flynn’s lone “No,” vote, multiple councilors expressed reluctant approval given the reality of Boston needing to diversify its revenue.
“I think after this vote, let’s not act like we’ve cleared a major hurdle,” said Dorchester Councilor John FitzGerald, of the councilors who voted against the original measure in June, but flipped in favor of the revision.
“While, I will vote in favor of this home rule petition today, I commit to looking at how we can make it more affordable for people to stay in their homes, whether that’s increasing the residential exemption, the elderly exemption, veteran exemption and looking at cutting spending…We do have to look at what cutting we have to do in the future as we think about how much money is coming in,” he added.
“We need to think critically about the next 5 to 10 years and how we can ensure that residents in the city of Boston can continue to rely on us to provide the city services they deserve and have come to expect,” said Roxbury Councilor Tania Fernandes Anderson.
Flynn also characterized the months-long negotiation between Wu and business leaders as filled with unnecessary discord.
“It did not have to be this divisive, pitting residents against businesses or public disagreements with the state and business community,” Flynn said, referencing Wu’s short spat with State Senate President Karen Spilka as the first tax proposal stalled in the upper chamber. “We can’t let ideology cloud our judgment when it comes to what’s best for the city of Boston. Leadership requires us to have difficult conversations, to meet with our constituents and be tolerant of each other’s views.”
Multiple councilors also expressed support for reexamining the city’s PILOT program – an arrangement that allows major tax-exempt schools, hospitals and cultural institutions to make voluntary payments in lieu of taxes based on their tax-exempt property values – as a potential source of revenue in the coming years. GBH is a participant in the PILOT program.
With the council’s approval, the revised measure now heads back to the legislature for consideration despite lawmakers having ended their formal session months ago. Multiple sources familiar with the talks have said the compromise should move forward easily, given months of negotiations between business community leaders and the Wu administration.
