For the first time in about a decade, property tax rates are being lowered on both homes and businesses in the largest city in western Massachusetts. But tax bills are likely to go up.
The Springfield City Council voted unanimously Monday night to set a residential tax rate of $19.53 per $1,000 of assessed value and to set the 2020 rate for commercial, industrial and personal property in the city at $39.23 per $1,000 of assessed value. The new residential rate is 15 cents lower than this year’s and the business rate is a 7 cent decrease.
These rates were recommended by the Springfield Regional Chamber, the business group with about 400 members in greater Springfield.
"I am incredibly pleased that ( councilors) recognized the value of business," said Chamber President Nancy Creed. " It strikes a fair balance between residents and business and I don't think we could ask for more."
Addressing the Council at a public hearing on the tax rates, Creed said that over the last decade the city had shifted more of the tax burden on to the backs of businesses that now pay about 40 percent of the city’s $216 million tax levy.
"Not only does the business community pay a greater portion of the property taxes than their overall value but it pays double the residential rate and it uses less services," said Creed.
John Perez, chairman of the Minority Business Council, called the tax burden on small businesses in Springfield “unfair.”
" Probably we think of the MassMutuals and Baystate(s) of the world, but most employers are small businesses and we are in hard hard times trying to make it here in the city," said Perez.
City Councilor Tracye Whitfield, who made the motion to set the rates that the council unanimously passed, said it sends a positive signal to businesses.
"We want to keep the jobs here and be more attractive to new businesses and that is how we grow our economy and get more revenue in to lower property taxes even if values go up," said Whitfield.
Despite the 15 cent reduction in the residential tax rate, the tax bill for the average single family home in Springfield is estimated to increase next year by almost $165. About 20 percent of homeowners will see their annual tax bill go up by at least $250, according to the city assessor’s office.
Rising property values are the reason tax bills are going up, according to chief assessor Richard Allen.
"We've seen a tremendous improvement in the single-family, two- and three-family categories," said Allen. "Selling prices above $200,000 are common these days in certain single-family neighborhoods. Those numbers dwarf what happened in other recent years."
The new tax rates differ by just a few pennies from what was recommended by Mayor Domenic Sarno.
Property owners can challenge the assessed valuation assigned to their property by filing an application for an abatement with the city assessor’s office.
Some homeowners including people over age 70, veterans, and the blind may qualify for some level of tax relief under state laws.
Next year, Springfield will begin a tax work-off program for seniors who meet certain income limits.
Under this program, 20 participants will be selected through a lottery to lower their tax bill by up to $1,000 by performing services for the city.