Worcester expected to delay decision on small-biz tax break
Photo/Grant Welker
Worcester City Hall
Wait until next year.
Worcester City Councilor-at-Large Morris Bergman's controversial proposal to provide a real estate tax break to small businesses may have to until spring.
On Tuesday night, Bergman learned research into his plan could take weeks and will likely not be completed by the time the tax rate is set by the council next month.
“The city manager said we have to vote on the tax classification first, and he seems to think the information I asked for will take time to get and digest,” he said. “We may be looking at taking this up in May.”
If approved, the measure would allow an exemption of up to 10% of the value of a small business owner’s property. It would be available to businesses employing 10 people or less located in space with an assessed value of less than $1 million.
The Massachusetts legislature enacted the law nearly three decades ago to give cities and towns the option to provide tax relief for small businesses. About a dozen municipalities have given the commercial exemption the green light.
Bergman said he and the council need more information on the impact the tax break will have on the rest of commercial property owners. He seeks information about the experience of other communities who have enacted it, how many businesses took advantage of it, how the communities made up for the lost revenue, and how much will it cost larger businesses.
“I'm trying to find out the numbers,” he said. “If it turns out that the amount of taxes to be paid by larger commercial property owners who don't qualify is substantial, I'll be the first to say it's not worth doing. Otherwise, it's something we should consider.”
The idea to propose the tax break came up as he campaigned for reelection last summer, he said.
“When I knocked on doors, small business owners asked if there was some way to get tax relief,” he said. “They said large companies have access to tax breaks, but not the little guy.”
The Worcester Regional Chamber of Commerce wasted no time in saying while Bergman’s proposal might make a good sound bite, it would further raise the commercial/industrial tax rate on the 96% of Worcester businesses, who don't qualify for the tax break.
The Worcester residential tax rate is $18 per $1,000 of assessed value while the commercial, industrial, and personal property rate is nearly double at $34.90.
Still, Bergman said its an idea worth discussing.
“I was taken aback by the chamber saying this is a gimmick,” he said. “What gimmick? It’s state law that the legislature has made a local option.”
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