EDC responding to BOS advice to request bigger investment in economic development

by beth on February 23, 2015

The Chair of Southborough’s Economic Development Committee found himself in an enviable position a few weeks ago. When David McCay presented his budge to the Board of Selectmen, they told him to consider asking for more.

The EDC Chair said the committee tried to “put together a budget that would fly.” At the same time, they looked to build the groundwork for staffing in increments. They were hoping for a paid intern in the Planning Department whose duties would include supporting the EDC.

Selectman John Rooney pushed to skip the incremental steps and jump to hiring a professional. He recommended giving the option to Town Meeting voters and letting them decide.

Rooney’s position was partially prompted by McCay’s description of what other towns are doing.

McCay explained that Westborough has a part-time Economic Coordinator. (Meanwhile, Marlborough invests over $500,000 per year and Framingham has 6 staff in Economic and Community Development.) Rooney said in comparison, the budget request was bordering on insignificant.

Rooney recommended the EDC look into hiring a professional coordinator part-time. He said it was time for the board to get serious. He believed that relieving the residential tax burden requires investing in economic development. Otherwise the Town will be “continuing to run after the bus. We’re not going to have a seat on it”.

McCay told the board that he would need to go back to the EDC to discuss it. Based on the revised materials included in this week’s BOS Meeting packet, they voted in favor.

The revised budget includes $23,400 for a part-time staff position. The budget will be presented to the BOS at their meeting on Tuesday night at 7:00 pm in the Town House Hearing Room.

Updated (4/8/15 12:57 pm): Fixed misspelling of David McCay’s last name. Sorry!

1 mike fuce February 24, 2015 at 9:18 AM

What a stupid idea, hire more government workers, that’s what really really need, I dont think so. Cut the business tax by 30% and watch them flock to Southborough. Oh what a novel idea. Mark my words, cut the business tax rate, businesses come, tax base goes up, and in the end you can cut the homeowners taxes. Been done before, it is proven, it works, I dont think we need any more government workers with all the benefits to figure out that very simple Business 110 (not 101, its the class after) class do you?

2 JOJAMA February 25, 2015 at 7:39 AM

Not following mysouthborough commenting rules (especially 1 and 2.)

3 beth February 26, 2015 at 6:27 PM

Since no one else has commented directly on this, I will.

I just want to make sure you understand the figure you would be asking the town to invest in that economic theory.

According to EDC, 20% of property tax revenue is from commercial/businesses. Cutting that by 30% would require residential property owners to invest a 7.5% tax increase up front to make up the difference.

How confident are you that flocking businesses would more than make up for the difference?

By the way – I’m not arguing that you are wrong. (I’m not an economist, and didn’t even take Business 110.)

I’m just saying that I think for residents to support a 7.5% tax increase they’d need more proof than you saying “it is proven, it works.” I know that as a voter, I do.

People are always pointing to proof of a theory by past success. Last year, Carl Guyer had “proof” that increasing commercial tax rates improves a town’s economy. You have “proof” that decreasing it does. Both models probably have factors that don’t directly translate to Southborough in 2015.

And I don’t think the perfect answer is necessarily found in Business 110. (I imagine that experts continue their education well beyond that course.)

It’s easy to sling insults at town officials from home. If you have solid proof and deeply believe in it, try actually bringing it to selectmen and asking them to consider it.

Finally – one more point you covered above is worker benefits. If they proceed with a part-time worker, it is without benefits. (That was specified at this week’s meeting where they talked about capping hours at 19.5 per week.)

4 Carl Guyer February 26, 2015 at 9:21 PM

Oops, I did not claim that increasing the commercial tax rate would improve the town’s economy. What I did point out is that increasing the commercial and industrial tax base in Southborough could increase the tax rate and harm local property values. I did advocate for a split tax to help offset the possible impact of a larger commercial and industrial tax base. I said this based on current and historical data from the Mass Department of Revenue.

5 Frank Crowell February 24, 2015 at 11:08 AM

We have a very nice industry in our town. It’s called Educational Non Profits. They preserve the town look and feel. The problem is some of them do not contribute the amount of money they use in services or match what they have taken off the tax roles. How they (some not all) are to be coaxed into contributing more is what the EDC should be working.

Convincing other types of new businesses to town is a very large task. The EDC would have to bury at least five years of stories on this blog alone to attract any entrepreneur and then there is the whole state of Mass issues. No wonder they need more money.

6 Carl Guyer February 26, 2015 at 3:40 PM

Here is a bit of commentary because of its late arrival will probably be unseen.

Hopefully the data below gives pause to those considering the suggestion of the EDC that Southborough should be competing with Westborough, Framingham and Marlborough as a magnet for commercial and industrial develop as a means to help, as they say, “stabilize” tax rates.

Westborough
Percentage of Tax Base/ Commercial & Industrial: 35.5%
Average Single Family Assessment: $432,745
Tax Rate: $18.59

Framingham
Percentage of Tax Base/ Commercial & Industrial: 23.5%
Average Single Family Assessment: $334,033
Tax Rate: $22.79

Marlborough
Percentage of Tax Base/ Commercial & Industrial: 32.8%
Average Single Family Assessment: $303,953
Tax Rate: $19.58

Southborough
Percentage of Tax Base/ Commercial & Industrial: 18.7%
Average Single Family Assessment: $557,337
Tax Rate: $16.23

As you can see, of the four towns, Southborough clearly leads this group in property values and tax rates favorable to residential property owners. If you think this grouping is a statistical anomaly, you would be wrong. In Massachusetts, municipalities with a high percentage commercial and industrial development typically have high tax rates and low average residential property values.

Data Source: Mass. Dept. of Revenue – Data Bank (online)

7 mike fuce February 28, 2015 at 11:47 AM

The parochial and uneducated suggestion that increasing business tax will help the tax base is ignorant. The higher the tax on business the lower the attraction to locate their businesses in a town, state or country. That my friend is business economics 102. Liberal thought always wants to tax more instead of cut wasteful spending. One thing we can agree on whether a democrat liberal or a republican rino, they spend way to much and most of it is very wasteful and I would add actually immoral.

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