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City Bracing For Flood Of Tax Appeals

Tuesday, October 09, 2012

 

The City Council approved the addition of a part-time Assistant City Solicitor last week to deal exclusively with the increased number of Appellate Tax Board cases expected after Worcester's real estate revaluation this year.

Nearly 2,400 tax abatements were filed this year, almost half of which were approved by City Assessor William Ford and his staff.

Ford said that his office did receive additional abatement applications, but they were all late filings received after the late June deadline. The City had 90 days, plus an additional 10 days under state law, to review and decide on the applications.

Filing With The Appellate Tax Board

Now that the City has worked through all the abatement filings and issued its approvals or denials, said Ford, property owners have 90 days to file with the state's Appellate Tax Board (ATB) if they still have issues with their final assessments.

The ATB is authorized by the Commonwealth to hold hearings and issue decisions on appeals for all state and local taxes, from property and real estate taxes to the sales taxes.

Filing with the board carries a fee that ranges from $10.00 for all property assessed at $20,000 or less to $100.00 for property with an assessed value between $100,000 and $1,000,00. Properties with assessed valuations in excess of $1,000,000 face a filing fee of $0.10 per $1,000 of assessed value with a minimum fee of $65.00 but not to exceed $5,000.

"I hate to see those people move forward with what they got assessed at," said Bill Breault, who sits on the Board of Directors at the Main South Community Development Corporation.

"I believe a lot of the businesses lawyered up, and they'll go to the state appellate board with theirs."

Some Worcester property owners have already begun the process.

George Valeri owns a commercial building at 26 Cambridge Street, which is home to a window company, an automotive repair company and a towing company. Valeri said the property's assessed value increased from $423,000 to $756,000 this year. An abatement later reduced the valuation by $30,000, but that was still too high for the property owner.

"It wasn't what I was looking for," said Valeri, the secretary of the Worcester Property Owners Association.

"If you do an income and expense analysis, it shows a value of about $300,000, and that's done by a third-party."

Valeri, who said he would be happy if his property was just returned to its old valuation, will not be hiring a lawyer and will instead represent himself for the ATB proceedings.

"This is nothing personal," he said. "It's survival."

Small Businesses Hit Hardest

Bill Vernon, the state director in Massachusetts for the National Federation of Independent Business, said the Commonwealth's dual tax rates for commercial and residential properties, first instituted through a ballot measure in the 1970s, already place an added burden on commercial property owners.

"When the valuation is off, that exacerbates the problem."

Worcester's fiscal year 2012 residential tax rate is $16.98 per $1,000 of assessed value. The city's commercial tax rate is $29.07 per $1,000 assessed valuation.

"Compared to some of their counterparts, it is lower," said Vernon.

In cities such as Lawrence and Holyoke, the commercial property tax rate is more than double the rate for residential properties.

Even though Worcester's commercial tax rate is on the low end of the spectrum, it still can take a toll on small businesses, especially if they see their property's valuation nearly double.

"What they're trying to do, frankly, is turn the property tax into an income tax," Vernon said.

But that plan can end up backfiring when the income generated by the commercial property cannot keep pace with its rising tax bill.

"What you get is less commercial property and less jobs and less economic activity."

 

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