Chamber: Tax rate hurts business recruiting

Tim Murray, president and CEO of the Worcester Regional Chamber of Commerce, says the organization will keep advocating for a single tax rate.

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By Sam Bonacci

Following a disappointing vote that halted five years of moving towards a single tax rate, Tim Murray said the Worcester Regional Chamber of Commerce will continue to encourage businesses to locate in the city, but the job will be tougher.

“The vote going opposite the way we have been going the past five years, it makes it more difficult to make the case why an employer should be here,” said the chamber’s president and CEO the day after the vote. “The policy we had been on for the last five years had impacted people in a minimal way, but it sent a signal to the business community that the city was pro-growth.”

The vote Tuesday night marked a move towards more of the tax burden being carried by the city’s businesses, Murray said. The vote Tuesday set the residential tax rate at $20.61 per $1,000 of valuation and the commercial-industrial rate at $33.98. This was in contrast to rates of $20.99 and $33.04 that had been endorsed by the chamber.

Under the final business rate, the city’s median commercial-industrial property of $275,300 will see a tax increase of $638. This hits hard in a community that relies on its small and mid-sized businesses for growth, Murray said.

“The vast majority of businesses in the city are small businesses, and this does have an impact,” he said. “It goes to the bottom line and impacts decisions about reinvesting, equipment or hiring an employee at full or part time.”

It also impacts the city’s ability to pull in businesses. With so many nearby communities with more favorable tax splits and lower rates, this vote has made the chamber’s job of selling businesses on Worcester that much harder, he said.

“Companies can have access to a lot of the positives the city of Worcester has, but be located right outside of town for a cheaper rate,” Murray said.

The chamber will take up the tax debate again next year, he said.