The Fitchburg City Council has again voted to reduce the property tax impact on commercial, industrial and personal property. At the annual Property Tax Classification hearing, the council recognized the importance of supporting small businesses and eventually move toward a single tax rate.
The North Central Massachusetts Chamber of Commerce attended the hearing and provided testimony on why it is important to reduce the tax burden on businesses
“Cities have many tools to approaching smart and successful economic development strategies. The property tax shift toward a single tax rate is one of the most effective ways to show businesses that a city is truly invested in growing its commercial base,” President and CEO Roy Nascimento told the councilors.
Through a spirited discussion, Councilor Marcus DiNatale noted that Fitchburg has the fifth highest commercial tax rate. That high tax rate does not attract businesses to Fitchburg, DiNatale added.
Ultimately, the councilors voted 8-2 in favor of reducing the burden on commercial property owners. Commercial property tax owners will still modest increases, but at a lower value than if there was no change. For fiscal year 2017, commercial property owners will see an average increase of $173.24 – had there been no change, the average increase would be $308.20.
Councilors Amy Green and Joel Kaddy, both small business owners, recognized that despite the fact that they would be paying higher taxes on their homes, tax increases on businesses would be an impediment to economic growth.
Property Tax Roll Call Vote Results
Motion to reduce the property tax shift from 118% to 116%
*Councilor Bisol was not able to attend the meeting but sent in a letter of support
Background on Property Tax Classification Hearings
Each year, communities hold Property Tax Classification Hearing to determine the rates at which residential, commercial, industrial and personal property are taxed. There are two models for property taxes: single rate and dual rate. The single rate means that both residential properties and commercial properties are taxed at the same rate. A dual rate system means that one group – typically businesses, shoulders more of the tax burden pays a higher rate of taxes based on a property’s assessed value.
A single rate tax system has come to be the best model for business friendly communities. Many argue that a higher tax rate for commercial properties does not create a business friendly environment.