The business community got the answer it was hoping for at last night’s Board of Selectmen meeting. In front of a room filled with local business owners and representatives, Selectmen unanimously voted to uphold the town’s single property tax rate.
Most years, Selectmen vote on the matter without much attention from the public. This year, resident Carl Guyer publicized his report making a case for moving to a split-rate tax. As scheduled, he made his pitch to Selectmen last night.
Guyer claimed that there is no working model for what the town has been trying to accomplish. He said that the town is seeking to increase the commercial and industrial rate of property ownership. He argued that it is not possible to raise the level above the almost reached 20% rate without lowering property values.
In his presentation, Guyer claimed that other towns that increased commercial property taxes showed increased business development.
The Southborough Economic Development Team and Corridor-9 worked to rally local businesses against the proposal. At the meeting last night, business owners made clear that changes in property taxes would be severely damaging to the small businesses operating on small profit margins.
Resident Dave Ferris argued about the unfairness of asking 6% of property owners to pitch in more when they already fund 20% of the town’s liabilities. He and others pointed to Guyer’s data about business development as showing only correlation and not causation.
Speakers also pointed to problems to business retention problems reported in nearby split-rate Marlborough. That town is purportedly struggling with a 17% commercial vacancy rate, versus Southborought’s 5%.
Selectman John Rooney explained the change of heart he has had on the issue over the years. (He voted for split-rate in 2010 but reversed that decision in recent years.)
Rooney echoed the belief of others that increased commercial taxes lead to a decrease in local business. He shared his learnings from the town’s consultants at Northeastern University: the single/split tax rate is a leading indicator to businesses of whether a town is business friendly. It is usually one of the first questions they ask when investigating a town as a possible business location.
The selectman also referred to Marlborough’s problems. He said that when the town lured TJX to move offices there from Framingham, they had to offer the business a 20-year TIF (Tax Increment Financing agreement). For the first few years, TJX is exempt from property taxes. After that, taxes gradually increase over term of the agreement.