The business community is alarmed by – and objecting to – getting a 22 percent increase in property taxes, guaranteeing fiery public comment and debate among officials for Mondays’ rate-setting. The night’s regular City Council meeting pauses at 6:30 p.m. for the hearing, which was until recently a rote affair.
While a staff proposal sees residential rates rise 5 percent, to $6.67 that property owners are charged per thousand dollars of assessed value from $6.35, commercial property owners are seeing a surge: That 22 percent hike takes their rate to $14.07 from $11.52. Commercial property owners pay around two-thirds of the city’s tax levy.
“We are beginning to experience tangible impacts of a changing macroeconomic environment and federal policies,” city manager Yi-An Huang explained in his letter to the council. Though “the levy increase for FY26 is lower than the previous levy increase,” or an overall 8 percent rise compared with the 9.2 percent rise approved last year at this time, the commercial sector wasn’t asked as much last year: Going to $11.52 from $10.46 was only a 10.1 percent increase.
The executive director of the small-business organization Cambridge Local First, Katie Labrie, said she was urging councillors to delay the discussion by one meeting using their “charter right” so CLF members had time to review the policy and provide meaningful feedback.
Letters arriving to councillors are urging them to reject the rate increase, or at least to have more conversation with the business community before imposing it.
https://embed.documentcloud.org/documents/26181209-251006-tax-rate/?embed=1
The increase “would impose an untenable annual expense on my tenants and, by extension, threaten the economic stability of our local business community,” said Stuart Rothman of First Cambridge Realty in a letter to the council. The company is in Mid-Cambridge between Harvard and Central squares.
Patrick Barrett, a lawyer, developer and business owner with interests in Central Square, called the proposed increase “shocking.”
The increase “is a burden we cannot bear and at the very least should have been notified of,” Barrett said.
“Taxes are too high for businesses to support themselves,” said Ted Galante, an architect based in Cambridge for 28 years who said he’d been looking at an expansion until he saw the proposed tax increase. “We have found that current rents and expenses are very high, and barely allow growth for businesses like mine – and others. If you support higher taxes, our company will likely be in the position of having to leave Cambridge altogether.”
Even a city councillor expressed surprise at the rate.
“I was stunned,” councillor Patty Nolan said in a public email, promising questions for city staff at Monday’s hearing.
City Council property tax rate classification hearing, 6:30 p.m. Monday at City Hall, 795 Massachusetts Ave., Central Square. Televised and watchable by Zoom videoconferencing.
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22% is a scary number. But that’s the change in the rate, which is only one part of the formula. What actually matters is the tax bill in absolute dollars, which is the rate times the property’s valuation.
The commercial sector still pays 66% of the levy, which is the maximum under state law. The commercial rate went up so much because commercial valuations dropped. Commercial tax bills won’t go up by 22%.
Here’s the actual problem:
” ‘the levy increase for FY26 is lower than the previous levy increase,’ [said the City Manager] or an overall 8 percent rise compared with the 9.2 percent rise approved last year at this time”.
Ok, so the increase is decreasing. But it’s still a big increase. Why is it so much higher than inflation? The city council needs to take a step back and reconsider spending so much.
Is it a crazy idea to suggest that Cambridge spends less instead of raising taxes?
Raising property taxes every year to fund Councilor’s pet social projects is a recipe for trouble.
Unfortunately the vacancy rates will make this increase minimally impactful. New construction will continue to slow. We are probably two years behind in strategic spending reductions. Increases will most adversely impact smaller businesses. Life sciences have slowed dramatically. The Golden egg.
It’s worth noting that the commercial tax rate in Cambridge, as provided in the Executive Summary document, remains much lower in Cambridge than surrounding communities even after the increase. $14.07 in Cambridge, next lowest is Brookline at $16.56, highest is Boston at $25.96.
Justin is right, we are still lower than the neighboring cities. This is looking like a problem in general inside the 128 belt of the state, and not the result of any specific spending programs ongoing here in Cambridge.
When Republicans take the helm of National government the damage trickles down to the states and the tax burden on the states that are not ‘taker red states’ always worsens as does the damage to small businesses… its been that way since Nixon at least.
As Ruby said, “Is it a crazy idea to suggest that Cambridge spends less instead of raising taxes?”
The city has been in a spendthrift mode for the last 15 years. It thought the biotech boom would never end.
All one has todo is look no further than the City of Cambridge Daily Update to see the superfluous spending. Frivolous beyond frivolous. Just wasteful. An ombudsman would have field day. But, the city refuses to hire one even though that person would pay for him/ her self a hundred times over.
How about some representation for all this taxation? What if the City were to take a more frugal approach and adopt a more fiscally conservative mindset? Everything’s going up: home and auto insurance. Gas and Electric. Water. Groceries. Most of this is beyond a city’s control. But a sober look at how our tax bucks are spent is within the City’s purview.
This is the govt that wants to build social housing to house even more people in the city that will drain even more resources.
Money does not fall from the sky. Someone has to pay for it. And if the business property tax goes up, the prices charged by the business goes up. Then the city councilors complain that this city is getting too expensive. Then they go ahead and give even more free resources away to those who cannot “afford it”, and then to pay for it, raise the property and residential tax even more. The cycle continues, the city councilors leave for other bigger things, the working person is left holding the bag.
The discussion of cutting spending its political career killer in this city.