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Worcester Could Face Flood of Abatement Requests After Tax Bills

Friday, May 18, 2012

 

It’s safe to say many Worcester taxpayers are sitting on pins and needles waiting for the city to set the tax rate. Likewise, city officials are bracing for what could be a mountain of tax abatement requests from unhappy customers.

“I think so, yes,” At-Large Councilor and former Mayor Konstantina Lukes said when asked whether she thought taxpayers might be biting their nails. “And there’s a more intense advocacy for a more favorable rate for businesses. Instead of the same predictable folks, we’re seeing a lot of different people.”

Pressure Is On

That puts the pressure on councilors during next week’s tax classification hearing. However it turns out, most appear in agreement on one issue: City Hall is going to be swimming in abatement requests once customers get their bills. They have 30 days to file for an abatement, which is when a homeowner appeals the new tax rate given to them by the city. 

“We’re going to have a ton of requests, absolutely,” said At-Large Councilor Joseph O’Brien, another former mayor, who believes the city should ready itself by beefing up staff “as much as necessary” so taxpayers can send their requests.

There could be another wrinkle. Lukes said the city has its next tax classification hearing in November, saying, “There may be two sets of abatement requests within six months.”

High Number Expected

While the exact number remains to be determined, the city projects between 1,600-2,000 abatement requests this year. Those who are successful will be paid out of an overlay reserve account. The assessor raises money in that account to cover abatements and exemptions that meet state requirements. According to Christina Andreoli, spokesperson for City Manager Michael O’Brien, abatements are granted when real or personal property has been overvalued or disproportionately valued.

There was $3.9 million budgeted for overlay in fiscal 2012, according to figures Andreoli supplied to GoLocalWorcester. In fiscal 2011, that amount was $3.11 million. In fiscal 2010, $2.75 million was budgeted. The figures did not include how much was spent. 

‘Considering’ Abatement

Several businesses throughout Worcester have already learned their property values, which in some cases increased by more than 100 percent. In extreme cases, such as with Saint-Gobain, values shot up more than 400 percent. That company could be among those seeking an abatement. Worcester businesses can expect to find their new property bills in the mail in the coming weeks.

“Anybody in the 100-percent-plus range is certainly at least considering it,” said Richard Kennedy, president and CEO of the Worcester Regional Chamber of Commerce.

A company like Saint-Gobain, from whom Kennedy is retired, needs to consider all its properties. The 400-percent increase was for just one parcel.

“First of all, you can’t file (an abatment) until you get your tax bill and pay it," Kennedy said. 

Staying Positive

District 4 City Councilor Sarai Rivera said she is maintaining a positive attitude – even though she is positive there will be a high number of abatement requests.

“Definitely a lot of people are going to apply,” said Rivera, who also thinks a good number of those requests will be granted. “I think with a couple people I talked to, yes, I think they will be successful. The numbers are just so very different. I mean we’re talking way over-the-top increases. I would imagine there would be a measure of success.”

O’Brien agreed, saying: “From my perspective, I think we’re going to have a high number of requests, and looking at some of the numbers, we’re going to see a high success rate.”

Another Bill

Taxpayers face more than the prospect of high tax bills. They’re also going to be hit with the first-quarter fiscal 2013 bill in July. That prospect has generated some talk over whether the city should delay sending out that bill. Councilors are not unaware of the financially dire straits in which many homeowners and businesses find themselves.

Rivera said she would support a delay in sending out first-quarter bills, if the city is allowed under state law. Massachusetts Department of Revenue spokesperson Robert Bliss was not immediately aware of the laws governing tax bills.

“If it’s something within our power, yes,” said Rivera. “I would support anything that will help our business owners or residents.”

Added Lukes: “Seventy percent of the property in the city is in escrow with a mortgage. They may not feel a hit, but what about those who have no mortgage or escrow and are paying for this right out of their pocket? There has been discussion on delaying the first-quarter bill. We haven’t spent a whole lot of time on it. We’re not going to make a hard and fast rule. This is probably a once-in-a-lifetime event.”

 

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