Empty downtown Boston office buildings like 600 Washington St., left, have caused a property tax crisis in Boston. Prior proposals, critics argue, would disproportionately benefit wealthy homeowners like those in the Ritz Carleton hotel-condominium complex, right. Photo by James Sanna | Banker & Tradesman Staff
I’m sure Boston Mayor Michelle Wu is just tickled pink.
Last week, the mayor’s archnemesis, state Sen. Nick Collins, took a big step towards accomplishing something that has repeatedly eluded Wu during her time in office.
With a major economic development bill winding its way through the Senate, the South Boston and Dorchester pol spotted his opportunity and seized it.
Collins, a moderate Democrat, reached across party lines and teamed up with state Sen. Bruce Tarr, a Gloucester Republican, to successfully attach an amendment to the Senate’s $325 million economic development bill. That bill passed the Senate in the wee hours of Friday morning.
The amendment would provide significant property tax relief to seniors, not just in Boston, but across the state, while also giving cities and towns the option to issue tax rebates to homeowners.
Boston residents have been slammed with double-digit property tax increases over the past few years amid the shift to remote work, which has devastated downtown office tower values and may wipe out as much as $2 billion in tax revenue, according to the Boston Policy Institute.
Part of Larger Fight with Mayor
Collins’ proposal comes after Wu, whose politics are much more in the progressive camp, lobbied State House leaders for more than two years to pass her own, significantly more controversial bill to provide property tax relief to city residents.
Wu’s proposal would have plugged the city’s revenue hole by jacking up tax rates on those half-empty office towers and on downtown businesses as well, a move that business and real estate leaders argued would have pushed more towers into foreclosure.
Citing the business community’s warnings, Collins played the starring role in stopping Wu’s commercial tax hike proposal in its tracks in the Senate.
He almost certainly had the backing of Sen. President Karen Spilka, who has had a difficult relationship with the Boston mayor and also warned about the potential economic hit to the city should it pass.
Collins’ actions have almost certainly earned the mayor’s ire.
Wu is very publicly backing a challenger to the South Boston senator in the upcoming Democratic primary: Latoya Gayle, advocacy director at nonprofit Neighborhood Villages.
What’s in Collins’ Proposal?
The mayor’s chagrin is also likely to only grow, with Collins’s much more targeted property tax relief proposal a significantly easier sell on Beacon than the mayor’s contentious plan.
Collins’ proposal would beef up tax relief for seniors and other homeowners of more limited means while avoiding tax rate hikes on commercial properties.
The amendment that was adopted would lower the age limit for eligibility for senior tax assistance to 65, triple the personal exemption to $1,500 and raise the income limit to 50 percent of HUD-adjusted area median income.
The statewide exemption would also triple, rising to $30,000.
Those seeking to qualify for a senior exemption would also get an additional 45 days after the deadline set by the specific city or town in which to apply.
Some seniors and other homeowners of more modest means across the state would also be eligible for tax rebates, under Collins’ proposal.
In Boston, the money would be drawn from Boston’s $1.7 billion in reserves.
City Council’s Supported Ideas
Collins has argued that taking steps to help seniors and homeowners of more modest means is preferable to an across-the-board reduction in residential rates, as the mayor’s plan envisions.
The mayor’s plan would benefit owners of multimillion-dollar condominiums and homes who, Collins and some other critics argue, often have properties that are already underassessed.
Scott Van Voorhis
By contrast, downtown Boston tower owners have filed a lawsuit challenging the city’s assessment practices, arguing the values – and the tax bills – on their properties were artificially jacked up by City Hall in retaliation for having filed for tax abatements.
“While commercial property owners have decided to take action in court,” Collins said during a State House speech last week, arguing that “homeowners in middle-class Boston have suffered worse.”
To become law, Collins’ proposal still has to make it through conference committee horse-trading with the House of Representatives, where close mayoral ally Rep. Aaron Michelwitz, chair of the powerful Ways and Means Committee, holds significant sway.
All of which puts Wu in an awkward position, with the City Council having already endorsed the various provisions in his bill, Collins noted.
“For the city to be against it now, they’d have to be for it before they were against it,” Collins said.
Still, while it’s hard to imagine the mayor would oppose the legislation, don’t expect her to rush to the State House to help push it over the finish line.
Scott Van Voorhis is Banker & Tradesman’s columnist and publisher of the Contrarian Boston newsletter; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.
