Recently, Banker & Tradesman ran a story essentially urging the state’s 351 municipalities to take a tougher stance on tax deadbeats, specifically commercial property owners.
In this age of supermodel-thin budgets and belts that can’t get any tighter, columnist Scott Van Voorhis shed light on the potentially hundreds of millions of dollars in back taxes owed, collectively, in just about every city and town in the Bay State. It’s a lot of cash that could go a long way in funding schools, firefighters, roads and senior centers.
And while we stand by the message sent by our columnist, we hope towns don’t, or rather, won’t, take his message too far. Not so far, that is, that they forget the notion of good-natured give and take.
You see, we worry that in their zeal to feed malnourished community coffers, some places may cast a hungry eye towards the kinds of tax breaks and development incentives used for decades to both entice new business development and retain and grow existing businesses.
In an address to the Greater Boston Chamber of Commerce last month, House Speaker Robert DeLeo said he and his colleagues would begin reexamining tax credits the state grants to various businesses. He offered no further details, of course, but what’s to stop towns from following the state’s example?
It’s all too easy for some planners and politicians to look at a development proposal that includes tax credits and breaks, however modest and fair and with every good intention, and cry “unaffordable!” In the zero-sum game of municipal funding, a tax break for a developer, even spread over several years (as most are), adds up to revenue that can’t go to the aforementioned firefighters and schools.
For some ambitious city councilors and town selectmen, it’s probably good politics, sadly, to do just that these days.
But history rewards the bold, and the bold step of spitting in the face of conventional wisdom is, we think, the wise course here.
In December, the city of Marlborough approved a $3.8 million tax increment financing (TIF) agreement for new development on the corporate campus of pharmaceutical company Sepracor Inc. In exchange for that $3.8 million in forgiven property taxes on new buildings over the next six years, the city gets a promise of 250 new jobs, and builds a foundation for future tax revenues, more jobs and hopefully more development.
Last winter, the town of Ayer considered a TIF proposal from a major defense contractor to consolidate its operations in the town, bringing 235 existing jobs to the community and creating 30 more. The project also promised to spend $5 million renovating a previously empty warehousing facility, turning it into a modern manufacturing center. Not surprisingly, the town approved the deal. Operations began last summer.
You have to give in order to get, have to scratch if you expect to be scratched in turn. Development, and the growth and relative prosperity it brings with it, has worked this way since planning offices first opened.
Our point is this: towns and communities ought not get so caught up in efforts to put every red cent into their coffers that they forget the value of letting some of those cents stay in the community, in the form of tax credits, incentives and breaks.
When the prevailing winds all blow towards the side of the penny pinchers, when all common sense says now is not the time to spend, but rather to save, do the opposite.
If you stop to think about it, perhaps there is no better time than now to invest in tax credits, to make yourself attractive to development when developers are looking, literally, for any port in a storm.
It just takes courage. Perhaps easier said than done, but the end, we think, justifies the means.
