The Telegram & Gazette has been writing about what the city manager and the tax assessor’s office have been saying, that the single-family home valuation has dropped on average 3 percent. Does the T&G want to hear the real story?
I received my parcel information from the assessor’s office, and to my surprise (shock) the value of my single-family home went up 23 percent. When I called the assessor’s office the person I talked to told me he would look into it. He called me back a week later and told me he had a little room to work with, and then told me upfront not to expect the value to be less than last year, because that was not going to happen. They did drop the value down, but it’s still at 10 percent higher. I think they are just picking numbers out of the air and hope most people won’t say anything.
I have talked to a number of people, and they say their property values have all gone up. The house next door to mine sold for $225,000 in 2005. That house is now on the market for $135,000. And my property value has gone up?
When you file for your abatement, who is going to do the review, the assessor’s office?
I don’t trust them, and I can’t see how they can be trusted to be fair. They should prove to us where they got these numbers, not us having to prove they are wrong.
RONALD ROY
Worcester
StatCounter
Friday, June 29, 2012
Sunday, June 24, 2012
Telegram: Tomorrow is deadline to contest Worcester real estate assessments
It’s last call for property owners wishing to contest their new real estate and personal property assessments.
Tomorrow is the deadline for property owners to file an abatement application with the assessor’s office and the way things are trending the city could see its biggest number of applications in years.
As of Friday, the city had received 1,217 real estate abatement applications, according to City Assessor William J. Ford.
While that number is consistent with previous year application numbers, Mr. Ford said, his office expects to receive “a large volume” of applications by tomorrow’s filing deadline, especially from commercial and industrial property owners.
The assessor said it is difficult to determine just how many applications have been requested or obtained because there are multiple ways in which a property owner can obtain an abatement application, including printing one off the city’s website at www.worcesterma.gov.
Of the 1,217 real estate abatement applications to date, Mr. Ford said the breakdown of the filings is as follows: 822, residential; 371 commercial, industrial and apartments; 24, mixed-used.
In addition, the city has received 79 abatement applications for personal property values, the assessor said.
Mr. Ford said about 40 abatements have been granted so far, and all have been for residential properties.
“Of the total applications received, we have reviewed and inspected 238 properties (212 residential and 26 commercial/industrial/apartments),” Mr. Ford wrote in a report that goes before the City Council Tuesday night. “An additional 24 inspections have been scheduled.”
Last fiscal year, the city received 1,257 abatement applications, while 1,432 were received in fiscal 2010 and 1,784 in fiscal 2009.
In 2009, 844 abatements were granted, totaling $708,648, according to the assessor. Meanwhile, 483 abatements, totaling $457,117, were approved in 2010 and 277, totaling $702,389, were approved last year.
The city assessor must act on an abatement application within three months of the date of its filing, unless the applicant agrees in writing before the three-month period expires to extend it. If the assessor does not act on the abatement application within 90 days, it is deemed denied.
Mr. Ford said when an application is received by his office, it is time stamped and logged. He said the information on the application is then entered into the Vision assessment system for tracking and approval, and scanned into the city’s electronic record database.
Each application is assigned to an assessor for further review and inspection.
Because city officials anticipate there will be an increase in the number of applications, the city has hired KRT Appraisals to assist with the review and interior inspection of residential properties.
Mr. Ford said that frees up in-house staff to focus on the review and interior inspections of commercial and industrial properties.
City officials are bracing for an influx of abatement applications from commercial and industrial property owners because of dramatic increases in their assessed valuations.
Of the city’s 2,278 commercial parcels, the assessed valuations for 317 have gone up 10 percent to 20 percent; 498 went up 20 percent to 40 percent; and 540 went up 40 percent to 100 percent.
Meanwhile, the valuations of 174 commercial properties have increased by more than 100 percent.
Of the 598 industrial properties in the city, the assessed valuations of 58 of those properties have increased by 10 percent to 20 percent; 98 properties went up by 20 percent to 40 percent and 101 properties shot up 40 percent to 100 percent.
In addition the assessed valuations of 60 industrial properties have more than doubled.
In comparison, residential property assessments decreased by 3.8 percent on average compared with the previous year.
Property owners are encouraged to pay the tax as assessed to avoid any loss of rights or additional charges. If the tax due is more than $3,000 for the entire year, the full tax must be paid without incurring interest, otherwise, the right to appeal to the state Appellate Tax Board is forfeited.
The assessor is required to provide written notification of the disposition of all abatement applications. Those who wish to appeal the decision of the assessor have 90 days to file an appeal with the state Appellate Tax Board.
Tomorrow is the deadline for property owners to file an abatement application with the assessor’s office and the way things are trending the city could see its biggest number of applications in years.
As of Friday, the city had received 1,217 real estate abatement applications, according to City Assessor William J. Ford.
While that number is consistent with previous year application numbers, Mr. Ford said, his office expects to receive “a large volume” of applications by tomorrow’s filing deadline, especially from commercial and industrial property owners.
The assessor said it is difficult to determine just how many applications have been requested or obtained because there are multiple ways in which a property owner can obtain an abatement application, including printing one off the city’s website at www.worcesterma.gov.
Of the 1,217 real estate abatement applications to date, Mr. Ford said the breakdown of the filings is as follows: 822, residential; 371 commercial, industrial and apartments; 24, mixed-used.
In addition, the city has received 79 abatement applications for personal property values, the assessor said.
Mr. Ford said about 40 abatements have been granted so far, and all have been for residential properties.
“Of the total applications received, we have reviewed and inspected 238 properties (212 residential and 26 commercial/industrial/apartments),” Mr. Ford wrote in a report that goes before the City Council Tuesday night. “An additional 24 inspections have been scheduled.”
Last fiscal year, the city received 1,257 abatement applications, while 1,432 were received in fiscal 2010 and 1,784 in fiscal 2009.
In 2009, 844 abatements were granted, totaling $708,648, according to the assessor. Meanwhile, 483 abatements, totaling $457,117, were approved in 2010 and 277, totaling $702,389, were approved last year.
The city assessor must act on an abatement application within three months of the date of its filing, unless the applicant agrees in writing before the three-month period expires to extend it. If the assessor does not act on the abatement application within 90 days, it is deemed denied.
Mr. Ford said when an application is received by his office, it is time stamped and logged. He said the information on the application is then entered into the Vision assessment system for tracking and approval, and scanned into the city’s electronic record database.
Each application is assigned to an assessor for further review and inspection.
Because city officials anticipate there will be an increase in the number of applications, the city has hired KRT Appraisals to assist with the review and interior inspection of residential properties.
Mr. Ford said that frees up in-house staff to focus on the review and interior inspections of commercial and industrial properties.
City officials are bracing for an influx of abatement applications from commercial and industrial property owners because of dramatic increases in their assessed valuations.
Of the city’s 2,278 commercial parcels, the assessed valuations for 317 have gone up 10 percent to 20 percent; 498 went up 20 percent to 40 percent; and 540 went up 40 percent to 100 percent.
Meanwhile, the valuations of 174 commercial properties have increased by more than 100 percent.
Of the 598 industrial properties in the city, the assessed valuations of 58 of those properties have increased by 10 percent to 20 percent; 98 properties went up by 20 percent to 40 percent and 101 properties shot up 40 percent to 100 percent.
In addition the assessed valuations of 60 industrial properties have more than doubled.
In comparison, residential property assessments decreased by 3.8 percent on average compared with the previous year.
Property owners are encouraged to pay the tax as assessed to avoid any loss of rights or additional charges. If the tax due is more than $3,000 for the entire year, the full tax must be paid without incurring interest, otherwise, the right to appeal to the state Appellate Tax Board is forfeited.
The assessor is required to provide written notification of the disposition of all abatement applications. Those who wish to appeal the decision of the assessor have 90 days to file an appeal with the state Appellate Tax Board.
Monday, June 18, 2012
Thursday, June 14, 2012
Sunday, June 10, 2012
Wednesday, June 6, 2012
Monday, June 4, 2012
Telegram: Questions remain over Worcester's commercial property valuations
WORCESTER — In the 2008 property tax revaluation, city assessors rated a four-story office building near Lincoln Square to be largely obsolete by the construction standards of the day, a decision that contributed to reducing the value of the building for tax purposes by millions of dollars.
It was a curious move, however, given that construction on the building, the Life Sciences and Bioengineering Center at Gateway Park, had only been completed the year before.
City officials said this past week they could find no explanation or justification on file as to why assessors would judge a new, state-of-the-art office building to be so outdated that it qualified for a significantly reduced property tax assessment.
The situation also has produced some head scratching at Worcester Polytechnic Institute, which owns the building through a subsidiary corporation.
“I have no idea how that transpired, frankly,” said WPI Chief Financial Officer Jeffrey S. Solomon, who added that he wasn't aware that the city had rated the building largely obsolete until he was contacted for this report.
The life sciences center is just one of hundreds of commercial structures across the city for which obsolescence ratings were set unusually high, which has the result of reducing the taxable values of those buildings, according to city records and independent assessing experts.
Most of the questionably high obsolescence ratings have been dialed back in this year's revaluation, but serious questions remain about how so many commercial buildings in productive use came to be assessed as mostly obsolete and whether the cash-strapped city lost untold millions in commercial property taxes as a result.
The functional and economic obsolescence ratings for WPI's life sciences center were reset to zero in this year's revaluation, which contributed to more than doubling the building's assessed value from just under $8 million last year to $17.1 million this year.
That was one of many jaw-dropping jumps in commercial property valuations unveiled as City Assessor William J. Ford combed through the property tax rolls slashing or eliminating high functional obsolescence rates set under his predecessor, Robert J. Allard Jr.
In one method of placing a value on a commercial building for tax purposes, known as the “cost approach,” assessors start with the replacement cost of a building. That amount is then reduced based on several factors, including the condition of the building and how well it suits the needs of modern business tenants. In assessing terms, that is, the value of the building is depreciated based in part on the degree to which it is functionally obsolete.
A moderately outmoded building might be judged to be 5 percent functionally obsolete. A completely outdated structure, such as a brick mill building from the 19th century, typically would be capped at 25 percent functionally obsolete, according to Mr. Ford and other assessing experts.
But hundreds of commercial and industrial buildings in Worcester were rated far more than 25 percent functionally obsolete as of the previous revaluation four years ago.
The functional obsolescence of 552 buildings was judged to be between 25 percent and 40 percent, while another 135 buildings were rated at between 41 percent and 70 percent, and 27 buildings were rated between 71 percent and 100 percent, according to a Telegram & Gazette review of city assessing records. All told, a quarter of the city's inventory of 2,900 commercial and industrial buildings was judged to be 25 percent or more functionally obsolete.
Massachusetts Association of Assessing Officers President Ronald Keohan said he couldn't recall ever having seen a functional obsolescence percentage higher than 25 percent in his work as the deputy assessor in Saugus. Larry Clark, the director of professional development for the International Association of Assessing Officers based in St. Louis, said he occasionally has seen them as high as 50 percent but only for long-disused industrial plants in the Midwest.
Mr. Ford, the city assessor who inherited the high commercial obsolescence figures when he took over the office three years ago, said he couldn't speak to how things were done before his appointment because the old software didn't provide a space for comments explaining unusual depreciation calculations and he couldn't find any written records justifying the high percentages. He has since overseen the installation of a new assessment software package.
“If my guys put something down as 15 percent obsolete, I'm not going to question that, but if it's 80 percent, you better have an explanation why,” Mr. Ford said.
After he took over, with the city manager's backing, Mr. Ford set about hacking away at what he considered to be questionably high obsolescence rates applied to commercial and industrial properties throughout the city.
The resulting spike in commercial property valuations incited an uproar among building owners fearful that the new assessed values would send their tax bills skyrocketing. Under intense pressure from the business community, the City Council last month approved a lower commercial tax rate, negating the financial impact of the higher valuations for some properties, and thus, quieting the tumult.
In defending the new higher values from strong business community pushback, City Manager Michael V. O'Brien initially seemed to cast doubt on the propriety of the former valuations. But Mr. O'Brien later backpedaled, assuring councilors that the previous values had been calculated in accordance with state regulations.
That puts Mr. O'Brien in the contorted position of publicly accepting the validity of the previous valuations, which were set on his watch, while at the same time systematically undoing them. He did not respond to several interview requests over the last two weeks.
The previous assessor, Mr. Allard, now retired and living in California, again defended the appropriateness of his valuations in a recent telephone interview. His position is backed up by the state Department of Revenue, which certified Mr. Allard's valuations in 2008 and continues to stand by that certification today.
Mr. Allard maintained that the high obsolescence percentages under his tenure had no impact on commercial property taxes because his assessors analyzed the rents earned by comparable buildings to arrive at an initial valuation, known as the “income approach” to assessments. The resulting valuations are then depreciated based on factors such vacancy rates and expenses.
The Department of Revenue requires assessors to calculate commercial valuations using at least two assessment approaches and further mandates that the resulting values must be within 15 percent of each other.
“The assessors were essentially matching the cost approach to the income approach by adjusting the obsolescence percentages. But it's meaningless,” Mr. Allard said. “We used the income approach. That's really the only way to value these commercial properties.”
But Mr. Ford said he also found many unusually high depreciation percentages in the income approach assessments calculated by his predecessor.
Late last month, the Department of Revenue certified the new, sharply higher commercial property values calculated under Mr. Ford's supervision.
Department spokesman Robert Bliss said he sees no inconsistency in signing off on a set of valuations that all but wipes out an important factor in arriving at the previously certified values.
“All I can say is that in our sampling of the values the city proposed, we looked at them, conducted a sort of audit. We felt it passed muster, and we approved it,” Mr. Bliss said. “I think what we've seen four years later is a conversion to a new data system, and the new assessor having the ability to exercise his own judgment.”
Thursday, May 31, 2012
Wednesday, May 30, 2012
Wednesday, May 23, 2012
T&G: Worcester councilors narrow tax gap
By Nick Kotsopoulos and Steven H. Foskett Jr.
WORCESTER — For the second fiscal year in a row, the City Council has narrowed the gap between the city's residential and commercial-industrial tax rates.
The council last night set this fiscal year's residential tax rate at $16.98 per $1,000 valuation and the commercial-industrial rate at $29.08. The vote was 6-5.
The residential rate is 92 cents higher than last fiscal year's rate, while the new commercial-industrial tax rate is $5.57 less than last fiscal year.
But because commercial and industrial property valuations have dramatically increased in many instances, the tax bills for business property owners will still be going up.
Under the new set of tax rates, the average annual tax bill for single-family homeowners will go up by $56 (1.7 percent), based on the average assessment of a single-family home at $198,061. A home assessed at that figure will have an annual tax bill of $3,363.
Meanwhile, the average annual tax bill for commercial property owners will go up by $755 (4.72 percent). The average assessment for commercial properties is $821,138 and those tax bills with the new tax rate will be $16,754.
It is also the first time since 2003 that the commercial-industrial tax rate will not be more than double the residential rate. The new commercial-industrial rate is roughly 1.7 percent greater than the residential rate.
More than 125 people packed the council chamber, with 21 residents and business owners arguing their position on the tax rate. The attendees spilled into the hallway, where a television monitor was set up outside the council chambers.
For more than an hour, business owners told the council that keeping the commercial tax rate high will end up hurting residents, who will have to pay more taxes to fill the void left by businesses that move to towns with more favorable rates.
“There is no doubt that a more equitable commercial tax rate would enable businesses to stay, grow, hire, and compete,” said Roberta Schaefer, executive director of The Research Bureau, which has long advocated for a single tax rate in the city.
Under the new rates, commercial and industrial properties will carry 39.56 percent of the city's tax burden even though they make up just 27.6 percent of the tax base. Residential properties, meanwhile, will foot the bill for 60.4 percent of the tax levy even though they make up 72.3 percent of the tax base, according to city assessors.
Mayor Joseph M. Petty proposed the set of tax rates as a compromise between what was being sought by the Worcester Regional Chamber of Commerce and those who favored a set of rates intended to hold the line on tax increases for homeowners.
Mr. Petty said his proposed tax rates recognized that many business owners will be hurting because of much higher than anticipated increases in their assessed valuations.
“This City Council gets it,” the mayor said. “The council recognizes the (tax) burden being placed on the business community. The dual tax system does hurt attracting businesses to Worcester and it is something we have to address.”
Those who supported Mr. Petty's proposed tax rates were: District 1 Councilor Tony Economou, Councilor-at-Large Michael J. Germain, Councilor-at-Large Joseph C. O'Brien, Councilor-at-Large Frederick C. Rushton and Councilor-at-Large Kathleen M. Toomey.
Mr. Economou supported the mayor's motion even though he proposed a set of tax rates that would have narrowed the gap between the residential and commercial-industrial rates even further. He called for a residential rate of $17.08 and a commercial-industrial rate of $28.82, but his motion never came up for a vote because the mayor's had already passed.
Those who favored other sets of tax rates were: District 5 Councilor William J. Eddy, Councilor-at-Large Konstantina B. Lukes, District 2 Councilor Philip P. Palmieri, District 4 Councilor Sarai Rivera and District 3 Councilor George J. Russell.
Mrs. Lukes and Mr. Russell both favored a set of tax rates that would have increased homeowner tax bills by $1, on average, while increasing tax bills for business property owners by $1,181 on average, while Mr. Palmieri favored the lowest possible residential tax rate.
Mr. Eddy and Ms. Rivera, meanwhile, favored tax rates that were somewhere between what Mrs. Lukes and Mr. Russell had supported and what Mr. Petty had called for.
Most business owners told councilors they supported the recommendation of the Chamber of Commerce, which proposed setting the rates at $17.18 per $1,000 assessed valuation for residents, and $28.56 per $1,000 for commercial and industrial properties. William Kelleher of Kelleher & Sadowsky commercial real estate firm said favorable tax rates in surrounding towns illustrate the competitive disadvantage the city puts businesses at with its current tax structure. He gave the example of the Jamesbury property on the Worcester/Shrewsbury line. The Worcester side of the building is taxed at $1.80 per square foot, while the Shrewsbury side is taxed at $.52 per square foot, he said.
While it's a separate issue, several business owners who spoke mentioned the recent revaluation of city properties that resulted in steep valuation hikes for many local commercial and industrial properties. Combining the valuation spikes without giving business owners some relief on the tax rate could spell economic disaster for the city, they said.
Leonard Zalauskas, a city resident and head of the school teachers union, favored the chamber's recommendation. He said increased economic development would support schools.
Resident John Reed admitted his support for the lowest residential tax rate made his voice a lonely one last night. But he said that while businesses might be popping the cork on champagne at having to pay lower taxes, they were shifting the tax burden back to residents, many of whom have no way to absorb the hit. He called the business community's argument one of false choices, relying on trickle-down economic theories he said have been disproved the world over.
Instead, Mr. Reed proposed, the council should focus more on attracting the gaming industry.
City Manager Michael V. O'Brien said the fiscal fourth-quarter tax bills, which will include the new tax rates and new property assessments, will be issued by June 1 and they will be due
WORCESTER — For the second fiscal year in a row, the City Council has narrowed the gap between the city's residential and commercial-industrial tax rates.
The council last night set this fiscal year's residential tax rate at $16.98 per $1,000 valuation and the commercial-industrial rate at $29.08. The vote was 6-5.
The residential rate is 92 cents higher than last fiscal year's rate, while the new commercial-industrial tax rate is $5.57 less than last fiscal year.
But because commercial and industrial property valuations have dramatically increased in many instances, the tax bills for business property owners will still be going up.
Under the new set of tax rates, the average annual tax bill for single-family homeowners will go up by $56 (1.7 percent), based on the average assessment of a single-family home at $198,061. A home assessed at that figure will have an annual tax bill of $3,363.
Meanwhile, the average annual tax bill for commercial property owners will go up by $755 (4.72 percent). The average assessment for commercial properties is $821,138 and those tax bills with the new tax rate will be $16,754.
It is also the first time since 2003 that the commercial-industrial tax rate will not be more than double the residential rate. The new commercial-industrial rate is roughly 1.7 percent greater than the residential rate.
More than 125 people packed the council chamber, with 21 residents and business owners arguing their position on the tax rate. The attendees spilled into the hallway, where a television monitor was set up outside the council chambers.
For more than an hour, business owners told the council that keeping the commercial tax rate high will end up hurting residents, who will have to pay more taxes to fill the void left by businesses that move to towns with more favorable rates.
“There is no doubt that a more equitable commercial tax rate would enable businesses to stay, grow, hire, and compete,” said Roberta Schaefer, executive director of The Research Bureau, which has long advocated for a single tax rate in the city.
Under the new rates, commercial and industrial properties will carry 39.56 percent of the city's tax burden even though they make up just 27.6 percent of the tax base. Residential properties, meanwhile, will foot the bill for 60.4 percent of the tax levy even though they make up 72.3 percent of the tax base, according to city assessors.
Mayor Joseph M. Petty proposed the set of tax rates as a compromise between what was being sought by the Worcester Regional Chamber of Commerce and those who favored a set of rates intended to hold the line on tax increases for homeowners.
Mr. Petty said his proposed tax rates recognized that many business owners will be hurting because of much higher than anticipated increases in their assessed valuations.
“This City Council gets it,” the mayor said. “The council recognizes the (tax) burden being placed on the business community. The dual tax system does hurt attracting businesses to Worcester and it is something we have to address.”
Those who supported Mr. Petty's proposed tax rates were: District 1 Councilor Tony Economou, Councilor-at-Large Michael J. Germain, Councilor-at-Large Joseph C. O'Brien, Councilor-at-Large Frederick C. Rushton and Councilor-at-Large Kathleen M. Toomey.
Mr. Economou supported the mayor's motion even though he proposed a set of tax rates that would have narrowed the gap between the residential and commercial-industrial rates even further. He called for a residential rate of $17.08 and a commercial-industrial rate of $28.82, but his motion never came up for a vote because the mayor's had already passed.
Those who favored other sets of tax rates were: District 5 Councilor William J. Eddy, Councilor-at-Large Konstantina B. Lukes, District 2 Councilor Philip P. Palmieri, District 4 Councilor Sarai Rivera and District 3 Councilor George J. Russell.
Mrs. Lukes and Mr. Russell both favored a set of tax rates that would have increased homeowner tax bills by $1, on average, while increasing tax bills for business property owners by $1,181 on average, while Mr. Palmieri favored the lowest possible residential tax rate.
Mr. Eddy and Ms. Rivera, meanwhile, favored tax rates that were somewhere between what Mrs. Lukes and Mr. Russell had supported and what Mr. Petty had called for.
Most business owners told councilors they supported the recommendation of the Chamber of Commerce, which proposed setting the rates at $17.18 per $1,000 assessed valuation for residents, and $28.56 per $1,000 for commercial and industrial properties. William Kelleher of Kelleher & Sadowsky commercial real estate firm said favorable tax rates in surrounding towns illustrate the competitive disadvantage the city puts businesses at with its current tax structure. He gave the example of the Jamesbury property on the Worcester/Shrewsbury line. The Worcester side of the building is taxed at $1.80 per square foot, while the Shrewsbury side is taxed at $.52 per square foot, he said.
While it's a separate issue, several business owners who spoke mentioned the recent revaluation of city properties that resulted in steep valuation hikes for many local commercial and industrial properties. Combining the valuation spikes without giving business owners some relief on the tax rate could spell economic disaster for the city, they said.
Leonard Zalauskas, a city resident and head of the school teachers union, favored the chamber's recommendation. He said increased economic development would support schools.
Resident John Reed admitted his support for the lowest residential tax rate made his voice a lonely one last night. But he said that while businesses might be popping the cork on champagne at having to pay lower taxes, they were shifting the tax burden back to residents, many of whom have no way to absorb the hit. He called the business community's argument one of false choices, relying on trickle-down economic theories he said have been disproved the world over.
Instead, Mr. Reed proposed, the council should focus more on attracting the gaming industry.
City Manager Michael V. O'Brien said the fiscal fourth-quarter tax bills, which will include the new tax rates and new property assessments, will be issued by June 1 and they will be due
GoLocal: Worcester’s Contentious Tax Debate
Walter Bird Jr., GoLocalWorcester Reporter
Whether they liked it or not, Worcester taxpayers finally found out what their tax rate is this year. On Tuesday, just weeks before the end of the fiscal year, city councilors set the residential rate for fiscal 2012 at $16.84 per $1,000 assessed value. The commercial-industrial rate was set at $29.46 per $1,000.
The vote was hardly unanimous – a 6-5 decision in favor of Chairman and Mayor Joseph Petty’s motion. Three other proposals motioned or supported by four councilors never came to a vote. The decision – made during a tax classification hearing that was held months after it should have been – increases the residential tax rate by 78 cents, from $16.06 in fiscal 2011, while reducing the commercial-industrial rate by $15.15. It didn’t satisfy everyone and it wasn’t what the Worcester Regional Chamber of Commerce had hoped for (its member businesses had backed a proposal that would have bumped the residential tax rate up to $17.18 and lowered the commercial-industrial rate to $28.56).
In the end, some saw it as a move toward what many councilors agreed should be the end game – a single-payer tax rate that was shelved in 1984 when the city adopted a dual tax system. It just won’t happen overnight.
“It’s a move in the right direction,” said Chamber President and CEO Richard Kennedy. “I think it represents positive movement.”
'Fair, Competitive'
In proposing the new rates, Petty called them “fair” and “competitive for the city of Worcester.”
At-Large Councilor and former Mayor Joseph O’Brien, one of those voting in favor of the new rates, said he used to be committed to voting for the lowest possible tax rate for residents.
“That was a mistake,” he said, adding, “When you try to find the middle ground, you run the risk of making both sides unhappy.”
At-Large Councilor and 15th Worcester District state representative candidate Kate Toomey also voted in favor, calling for “some form of compromise.”
“We need to find a fair mix between homeowners and the business community,” said Toomey. “This is the most difficult vote during my time in office. But the mayor’s compromise is the best compromise.”
In Support
Also supporting the mayor were At-Large Councilors Frederick Rushton and Michael Germain, along with a reluctant District 1 Councilor Tony Economou, who had suggested residential and commercial-industrial rates of $17.08 and $28.82, respectively. His was the closest to the chamber’s proposal.
“This is an opportunity to seize the moment, to keep people in their homes and in their jobs,” Economou said. “It’s not residents. It’s not commercial. It’s all of us. We’re all in this together.”
The Opposition
District 5 Councilor William Eddy, At-Large Councilor Konstantina Lukes, District 2 Councilor Philip Palmieri, District 4 Councilor Sarai Rivera and District 3 Councilor George Russell all voted against Petty’s motion, with Eddy looking at the sheets of paper listing the different rate proposals and saying: “I can't find in here justification to look voters in the eye and tell them why I’m raising their taxes this year.”
Russell turned to the mayor when he spoke and said, “I hate to say I told you so, Mr. Mayor, but I told you so.”
The councilor has been a fierce critic of a property valuation process that saw the average residential property value decrease by 3.8 percent over last year. In contrast, some commercial properties saw their valuations skyrocket – in the most severe cases by as much as 400 percent.
“I told you this assessing process was not correct,” Russell said. “I’m not going to turn my back on voters to make good on the mistakes of past assessors or the current assessor.”
'A Challenge'
Among the businesses suffering sticker shock when commercial valuations came out was Saint-Gobain, formerly Norton Company. The average valuation for its properties went up 191 percent, and one of company's properties was on the 400 percent list. Bob Smith, a vice president with the company, sounded a warning that Saint-Gobain could someday exit Worcester.
“We support a $70 million local payroll and spend $80 million in local community businesses,” Smith said. “We’ve donated $15 million in this city since 1990. Over the past two years, we’ve spent over $10 million to address infrastructure issues. The current valuation puts Saint-Gobain in Worcester among the highest-cost plants globally. It is going to be a challenge to make additional investments going forward.”
Some councilors and speakers at Tuesday’s hearing talked about the “us versus them” mentality when it comes to setting residential and commercial-industrial tax rates, among them Roberta Schaefer, president and CEO of The Worcester Regional Research Bureau.
“The only way to avoid this perennial battle,” said Schaefer, “is to phase in a single tax rate. The council should seize the opportunity to end a policy that has pitted us against one another.”
Her suggestion that a single tax rate could be ushered in within three years, however, was widely dismissed as impossible.
Bills to be Mailed
With the tax rate set, tax bills will soon be sent out. And unless the council decides otherwise, the first quarter bills for fiscal 2013 will arrive in the mail sometime in July. Then the council will meet in either November or December to set next year’s tax rate.
It all makes for a “recipe for disaster,” according to Palmieri, acknowledging no matter what councilors decided Tuesday night, tax bills would be enormous for many residents and business owners. That is likely to lead to a flood of abatement requests, which Lukes fears will be followed by even more after next year’s tax rate is set. Taxpayers have 30 days after receiving their bills to file an appeal.
Like some of her colleagues, Lukes referenced the valuation process. She went a step further, however, in calling for an all-out investigation into why the property values for some businesses went higher than ever before.
“Some have suggested it was criminal,” said Lukes. “Some said it was incompetence. We need an investigation. This council cannot solve those problems tonight. We can deal with the issue of the tax rate amid the controversy over the assessor.”
'An Investment' Made
While council chambers was packed when the hearing started at 7 p.m. – and the heat sweltering – the crowd thinned out considerably as the night wore on. There were noticeable departures when it became clear as councilors talked that the chamber’s proposed tax rate had not gained traction.
Among those walking out were Steve Vaillancourt and his wife, Lisa, of Millbury. They own Advanced Cleaning on Washburn Street, a business they moved to Worcester in 2005.
“We made an investment in ourselves by buying that property,” Steve Vaillancourt said before the hearing. “Do we have something that’s saleable when we retire?”
He said the couple’s first tax bill in 2005 was “just north of $3,000.” The last bill was just under $10,000, he said.
“We don’t think residents should take on everything here,” Lisa Vaillancourt said. “We’d like to see a middle ground.”
Stopped as they left the hearing almost two hours later, Steve Vaillancourt said he hadn’t heard what he’d hoped, saying: “I felt positive going into it. As soon as (Lukes) spoke, I knew where it was going. It’s too pro-constituent. You can see they’re playing right to their constituents. I can understand that, but there’s got to be some balance.”
Whether they liked it or not, Worcester taxpayers finally found out what their tax rate is this year. On Tuesday, just weeks before the end of the fiscal year, city councilors set the residential rate for fiscal 2012 at $16.84 per $1,000 assessed value. The commercial-industrial rate was set at $29.46 per $1,000.
The vote was hardly unanimous – a 6-5 decision in favor of Chairman and Mayor Joseph Petty’s motion. Three other proposals motioned or supported by four councilors never came to a vote. The decision – made during a tax classification hearing that was held months after it should have been – increases the residential tax rate by 78 cents, from $16.06 in fiscal 2011, while reducing the commercial-industrial rate by $15.15. It didn’t satisfy everyone and it wasn’t what the Worcester Regional Chamber of Commerce had hoped for (its member businesses had backed a proposal that would have bumped the residential tax rate up to $17.18 and lowered the commercial-industrial rate to $28.56).
In the end, some saw it as a move toward what many councilors agreed should be the end game – a single-payer tax rate that was shelved in 1984 when the city adopted a dual tax system. It just won’t happen overnight.
“It’s a move in the right direction,” said Chamber President and CEO Richard Kennedy. “I think it represents positive movement.”
'Fair, Competitive'
In proposing the new rates, Petty called them “fair” and “competitive for the city of Worcester.”
At-Large Councilor and former Mayor Joseph O’Brien, one of those voting in favor of the new rates, said he used to be committed to voting for the lowest possible tax rate for residents.
“That was a mistake,” he said, adding, “When you try to find the middle ground, you run the risk of making both sides unhappy.”
At-Large Councilor and 15th Worcester District state representative candidate Kate Toomey also voted in favor, calling for “some form of compromise.”
“We need to find a fair mix between homeowners and the business community,” said Toomey. “This is the most difficult vote during my time in office. But the mayor’s compromise is the best compromise.”
In Support
Also supporting the mayor were At-Large Councilors Frederick Rushton and Michael Germain, along with a reluctant District 1 Councilor Tony Economou, who had suggested residential and commercial-industrial rates of $17.08 and $28.82, respectively. His was the closest to the chamber’s proposal.
“This is an opportunity to seize the moment, to keep people in their homes and in their jobs,” Economou said. “It’s not residents. It’s not commercial. It’s all of us. We’re all in this together.”
The Opposition
District 5 Councilor William Eddy, At-Large Councilor Konstantina Lukes, District 2 Councilor Philip Palmieri, District 4 Councilor Sarai Rivera and District 3 Councilor George Russell all voted against Petty’s motion, with Eddy looking at the sheets of paper listing the different rate proposals and saying: “I can't find in here justification to look voters in the eye and tell them why I’m raising their taxes this year.”
Russell turned to the mayor when he spoke and said, “I hate to say I told you so, Mr. Mayor, but I told you so.”
The councilor has been a fierce critic of a property valuation process that saw the average residential property value decrease by 3.8 percent over last year. In contrast, some commercial properties saw their valuations skyrocket – in the most severe cases by as much as 400 percent.
“I told you this assessing process was not correct,” Russell said. “I’m not going to turn my back on voters to make good on the mistakes of past assessors or the current assessor.”
'A Challenge'
Among the businesses suffering sticker shock when commercial valuations came out was Saint-Gobain, formerly Norton Company. The average valuation for its properties went up 191 percent, and one of company's properties was on the 400 percent list. Bob Smith, a vice president with the company, sounded a warning that Saint-Gobain could someday exit Worcester.
“We support a $70 million local payroll and spend $80 million in local community businesses,” Smith said. “We’ve donated $15 million in this city since 1990. Over the past two years, we’ve spent over $10 million to address infrastructure issues. The current valuation puts Saint-Gobain in Worcester among the highest-cost plants globally. It is going to be a challenge to make additional investments going forward.”
Some councilors and speakers at Tuesday’s hearing talked about the “us versus them” mentality when it comes to setting residential and commercial-industrial tax rates, among them Roberta Schaefer, president and CEO of The Worcester Regional Research Bureau.
“The only way to avoid this perennial battle,” said Schaefer, “is to phase in a single tax rate. The council should seize the opportunity to end a policy that has pitted us against one another.”
Her suggestion that a single tax rate could be ushered in within three years, however, was widely dismissed as impossible.
Bills to be Mailed
With the tax rate set, tax bills will soon be sent out. And unless the council decides otherwise, the first quarter bills for fiscal 2013 will arrive in the mail sometime in July. Then the council will meet in either November or December to set next year’s tax rate.
It all makes for a “recipe for disaster,” according to Palmieri, acknowledging no matter what councilors decided Tuesday night, tax bills would be enormous for many residents and business owners. That is likely to lead to a flood of abatement requests, which Lukes fears will be followed by even more after next year’s tax rate is set. Taxpayers have 30 days after receiving their bills to file an appeal.
Like some of her colleagues, Lukes referenced the valuation process. She went a step further, however, in calling for an all-out investigation into why the property values for some businesses went higher than ever before.
“Some have suggested it was criminal,” said Lukes. “Some said it was incompetence. We need an investigation. This council cannot solve those problems tonight. We can deal with the issue of the tax rate amid the controversy over the assessor.”
'An Investment' Made
While council chambers was packed when the hearing started at 7 p.m. – and the heat sweltering – the crowd thinned out considerably as the night wore on. There were noticeable departures when it became clear as councilors talked that the chamber’s proposed tax rate had not gained traction.
Among those walking out were Steve Vaillancourt and his wife, Lisa, of Millbury. They own Advanced Cleaning on Washburn Street, a business they moved to Worcester in 2005.
“We made an investment in ourselves by buying that property,” Steve Vaillancourt said before the hearing. “Do we have something that’s saleable when we retire?”
He said the couple’s first tax bill in 2005 was “just north of $3,000.” The last bill was just under $10,000, he said.
“We don’t think residents should take on everything here,” Lisa Vaillancourt said. “We’d like to see a middle ground.”
Stopped as they left the hearing almost two hours later, Steve Vaillancourt said he hadn’t heard what he’d hoped, saying: “I felt positive going into it. As soon as (Lukes) spoke, I knew where it was going. It’s too pro-constituent. You can see they’re playing right to their constituents. I can understand that, but there’s got to be some balance.”
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