Worcester homeowners in line for 9.6% tax increase; values up

WORCESTER - City Councilors voted 7-4 Tuesday night to keep residential taxes as low as possible next year, approving a rate of $14.34 per thousand for residential properties and $31.26 per thousand for commercial and industrial properties.

“I don’t know how much more people can handle,” at-Large Councilor Donna Colorio said, citing a 40-year high in inflation that is reflected in higher food, energy costs and more. “I think we have no other choice this year but to vote for the lowest residential tax rate.”

District 2 Councilor Candy Mero-Carlson agreed.

“I can’t see how we do anything other than vote for (that),” Mero-Carlson said, adding that taxes were already pricing people out of living in Worcester.

Worcester is among the communities that sets different rates for residential property and commercial-industrial property.

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Due to sharply increased residential property values and other factors, the average residential tax bill for single family homes will still rise by 9.63% - or $431 - next year to $4,908, according to information provided by city Assessor Samuel E. Konieczny.

Meanwhile, the average commercial tax bill will decrease $2,017 or 5.65% compared with 2022. The average commercial tax bill will be $33,662, according to meeting materials.

“These are some painful realities,” at-Large Councilor Moe Bergman said.

$20.3 billion in property

Worcester has a total assessed value for all taxable property of $20.314 billion for fiscal year 2023, an increase of 13.3%. This is based on the legal assessment date of Jan. 1, 2022.

But several factors have made this “an unusual year,” as District 3 Councilor George Russell said during discussion Tuesday night.

First, residential property values have increased dramatically. The average single-family home is assessed at $342,240 this year, an increase of 16.28%, for example, according to meeting materials.

Meanwhile, the commercial property values have remained largely the same, increasing only 0.6%. Coupled with a decreasing percentage of the city’s tax base as commercial property - down to 20.8% of the total assessed value from 22.7% in 2022 - that adds pressure to the residential taxpayer to make up the difference.

Armed with this information, councilors held the annual hearing to set the tax rates for the next year. At issue is how to divide the tax burden so that the city gets enough revenue without overly burdening either residents or businesses and causing either to leave town.

District 5 Councilor Sean Rose, chairman of the Council’s Economic Development Committee, initially proposed rates of $14.64 residential and $30.12 commercial.

A balancing act

He called it an attempt to “balance both worlds” of those who want the lowest possible residential rate and those (largely business interests) who want to close the gap between the residential and commercial rate and eventually get to a single tax rate for both residential and commercial property.

Russell countered by advocating for the lowest possible residential rate and Colorio and Bergman joined him in their support.

Bergman argued this could be seen as good for the business community because the average business would have its taxes decrease. And while he admitted that it was “not going to help” when he told residential taxpayers that he supported raising their taxes around $400, “I’d rather tell them that than a higher amount.”

At-Large Councilor Khrystian King argued that with Worcester growing, “putting people first will feed businesses.”

He requested that the city, the Worcester Regional Chamber of Commerce (who was advocating for a 13.3% tax increase for both residents and businesses, resulting in a $14.76 residential / $29.67 commercial/industrial split tax rate) and business owners come up with ways to creatively support small businesses, particularly women- and minority-owned small businesses.

Mayor Joseph M. Petty endorsed this proposal, but also advocated for the best of both worlds that Rose outlined.

Finally, at-Large Councilor Kate Toomey proposed a further “compromise” of $14.47 residential and $30.75 commercial, although she admitted that she didn’t likely have the votes.

In the end, Rose’s motion failed with only himself, Petty, District 4 Councilor Sarai Rivera and Toomey voting in favor.

Bergman, Colorio, District 5 Councilor Etel Haxhiaj, King, Mero-Carlson, at-Large Councilor Thu Nguyen and Russell voted yes to pass the lowest possible residential tax rate.

This article originally appeared on Telegram & Gazette: Worcester homeowners get 9.6% tax increase; business owners down $5.65%