NORTH ADAMS, Mass. – The Finance Committee on Thursday voted to recommend a property tax split of 1.715, defying the mayor’s call for the maximum on the commercial side to be reached.
But the city council wasn’t convinced it was the right move, especially after years of trying to narrow the “absurdly high” gap between residential and commercial rates.
The proposed rate for the home would be $17.46 and the commercial rate would be $38.35 per appraisal of $1,000, both about $1 lower than last year. The average homeowner would see a tax bill of $3,400 and the average business would see $16,649. The shift would jump from 1.68 to 1.75, back to what it was in 2012.
“My main argument against this is that I already see our business tax rate as absurdly high compared to our residential tax rates,” committee chair Keith Bona said. “So… to say the trade price or bill will go down is akin to saying when gas was $3 and went up to $6 it’s gone down to $5.75 and you should be happy .”
More than a dozen people attended the committee meeting, including several small business owners, who agreed with committee members’ argument that a high business tax rate is a burden on small businesses.
“We’re the third tallest in the state and I find that embarrassing and I think it sends a really negative message about our willingness to support small businesses and encourage new small businesses,” said Rye Howard, owner of the Bear and Bee Bookstore in the Holdenstr.
The expected drop in commercial bills looks good but hides the fact that the rate is so high to begin with, they said. “There are scenarios where I might buy [the building the store is in] and I would pay more taxes than the mortgage. … It just feels bad.”
North Adams has had the third highest rate of trade in the state after Pittsfield and Holyoke for the past two years. In contrast, it ranks among the lowest housing tax bills in the state — last year it was 15th lowest and the year before it was 12th.
Lincourt provided data on two local businesses — one large and one small — showing that even at the higher strata they would see their tax bills drop by between $30 and $200.
Macksey described the proposed prices as a win-win.
“We tried to minimize the impact on residents. That being said, we also felt that this is a good time for the commercial and residential portion of our portfolio to see a tax rate cut as well,” she said.
Committee members countered that companies pay more for utilities, rent, loans, staff, inventory and equipment, and so on. And that flat business growth was due to the pandemic, write-offs, lack of investment and the transition from commercial real estate to non-profit status.
Higher tax rates and lower real estate values aren’t conducive to attracting bank financing for startups and expansions, Bona said, and committee member Lisa Blackmer said they need to look at “the big picture.”
“I’ve heard about the struggles of the businesses that have been shut down or shut down for part of the time during the pandemic, that’s one of the reasons why their values have gone down and why personal property has gone down – because they don’t have the money to to invest,” she said.
The North Adams Chamber of Commerce sent a letter to the Mayor and Councilors expressing “strong opposition to such a significant burden shift and our deep concern at what this shift will mean, both materially and perceptually, for existing and potential businesses in North Adams.” means. “
The city is seeing a spike in closures, downsizing and relocations, the chamber’s board said, adding that many businesses are reluctant to speak out at the risk of losing customers.
“Unlike communities with a flat tax rate, these formulas consistently penalize businesses that are already significantly burdened by additional spending that residents do not face,” the board wrote, adding that the shift in the tax burden “is for the kind of robust just isn’t effective and thriving business that we all hope to encourage here.”
Jessica Sweeney, owner of Savvy Hive on Main Street, said she has residential and commercial properties in the city.
“It’s really difficult to pay taxes the way they are now, and I’m constantly having to choose between paying people to work in my business or paying my taxes,” she said. “A lot of people come to me about opening stores and look at that rate and say no, it’s not worth it.”
Committee member Bryan Sapienza said it was difficult to buy anything, even clothes, in North Adams.
“We used to have JC Penney, we used to have brands, we used to have other stores in the area,” he said. “We want to try to attract businesses, and with a high business tax rate, you’re not going to get those bigger deals.”
The city also needs specialty stores and corner shops, he continued. “Those kinds of deals drew people in and they’re just as important as the big deals.”
Bona said it’s difficult to attract business – and jobs – when rates are so much lower in surrounding communities. Adams set a commercial price of $25.65 this year.
“I believe that a strong business community is an overall healthy community,” Bona said. “I don’t want residents to have to go to Bennington or Pittsfield for services, I want them here.”
There was some back-and-forth between the committee members and the mayor, who attended remotely from out of state, over the tax collection forecast by the budget.
“We’re not trying to attack companies that we want to grow our business with, but we’re also looking at the housing base. And again this is a year where we are comfortable using both sides,” said Macksey.
Councilor Wayne Wilkinson, who attended the meeting, said he could not support a move above 1.72 and preferred 1.68. He also implied that the mayor was soliciting votes in next year’s election, which the mayor firmly refuted.
“I always try to do my best and act in the best interests of the city, which includes residents and businesses,” she said. “At this point I firmly believe that 1.75 is best.”
Blackmer suggested that the committee split the difference between 1.68 and 1.75 by recommending 1.715. This was requested and accepted unanimously.
Lincourt will have the new figures for next week’s city council meeting. The residential rate is approximately $17.67 and the commercial rate is approximately $37.59.