For Immediate Release:
Tuesday, October 25, 2001
Director, Communications & IS
New economic analysis shows Boston Ballot Question 1 will cost job
Increases in the commercial and industrial property tax that have taken place since 1990 will, by 2002, have cost the state 51,175 jobs. A property-tax increase being put before Boston voters next month would increase this tally by 1,510.
Boston would lose more than 1,510 jobs if the proposal is approved. This is the result of an analysis by the Beacon Hill Institute at Suffolk University.
Advocates of open space, community preservation and affordable housing are promoting the tax hike, which will appear on the ballot as Question 1. This will be the first time Bostonians will be asked to vote on 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 would impose 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. Advocates expect, though cannot guarantee, dollar-for-dollar matching funds from the state over this period.
Much attention has been paid to the new revenue that will be provided to build affordable housing and preserve historic buildings. But little debate has focused on the potential job losses to the city and state.
The Beacon Hill Institute identified the job impact by estimating the relationship between Massachusetts jobs and Massachusetts property taxes, finding that for every one-percentage point by which property taxes rise, Massachusetts employment falls by almost two percent.
Passage of Question 1 in Boston means the city 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, said David G. Tuerck, PhD, Executive Director of the Beacon Hill Institute. Boston businesses pay the highest property taxes in the state, said Dr. Tuerck. This measure simply puts the burden of a statewide housing problem on local businesses, with predictable negative consequences for local workers.
The Beacon Hill Institute at Suffolk University is a nonprofit, nonpartisan economic research organization. It applies state-of-the-art economic methods to the analysis of current public policy issues.
For a copy of the BHI FaxSheet, Boston Ballot Question One Will Cause Job Losses, click here (FAXSHEET PDF Format ) or call BHI at 617-573-8750 or e-mail firstname.lastname@example.org
Revised format on: 02-Jul-2003 3:22 PM
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