 |
Decade-long rise in commercial property taxes a disincentive
|
| |
Decade-long rise in commercial property taxes a disincentive
|
from NewsLink, Vol. 6 No. 1, Fall 2001
On October 25 BHI released the FaxSheet, New Economic Analysis Shows Boston Ballot Question 1 Will Cost Jobs, detailing the adverse economic effects of a proposal to raise Boston's property tax. Using our econometric model of the state, Massachusetts-STAMP, our study found that increases in the commercial and industrial property tax that have taken place since 1990 will, by 2002, have cost the state 51,175 jobs. The focus of the report, cited in both the Boston Globe and Boston Herald, is a property-tax increase of 2% being put before Boston voters would increase this tally of lost jobs by 1,510.
Advocates of open space, community preservation and affordable housing were promoting the tax hike. It was proposed under the auspices of the Community Preservation Act of 2000 (CPA), which enables local cities and towns to enact surcharges on real estate taxes outside the levy limitations of Proposition 2 1/2.
The Boston initiative proposed a 2 percent property tax surcharge that would exempt $100,000 of residential property. The initiative also includes exemptions for low-income homeowners.
If approved by voters, the surcharge is expected to collect $14 million a year from Boston taxpayers over the next five years. An amount which advocates claim would be matched by the state.
Much attention has been paid to the new revenue that will be provided to build affordable housing and preserve historic buildings. However little debate has focused on the potential job losses to the city and state.
Passage of Question 1 in Boston would worsen the substantial job losses that the recession and past increases in the Boston commercial property tax rate have already inflicted on the local economy. Boston businesses already pay among the highest property taxes in the state. This measure simply puts the burden of a statewide housing problem on local businesses, with predictable negative consequences for local workers.
*P.S. On Tuesday, November 6, Boston voters rejected the CPA Ballot Question 1 by a 43% to 32% margin.
NewsLink is the quarterly newsletter of the Beacon Hill Institute for Public Policy Research at Suffolk University. © 1996-2002. All rights reserved.
HTML formatted on 9/9/02 8:49 PM