Tax Battle in Worcester is Between Residents and City
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Wednesday, December 17, 2014
Patrick Sargent, GoLocal Worcester Contributor
As announced last week during a tax classification hearing, the real estate taxes in Worcester for residents and businesses owners have both been raised for fiscal year 2015. On Tuesday night, the city council was petitioned to break down the annual payments for residents during a calendar year, in addition to the fiscal year calendar the city's tax calendar schedule is on.
The petition proposed by Michal Grandone, of Worcester, asked the city council to "consider if it would save taxpayers confusion if the real estate tax bills had an additional column showing what the actual tax is per said 'Calendar Year' in addition to crossing years because the city is on a 'Fiscal' based tax calendar schedule."
The tax rates for Fiscal 2015 are $20.07 for residential and $31.73 for commercial, industrial and personal property. These numbers are based on per $1,000 of property value. The tax rates have each gone up nearly $1 per $1,000 from 2014. Property is assessed at 100% of the value of the home.
The average increase for residential tax is $107 and the average increase for commercial tax is $300. These rates were proposed to the council by city councilor Anthony Economou.
The Annual Cost of Taxes During a Calendar Year
The fiscal year in the city of Worcester runs from July 1 to June 30. FY 2015 began July 1, 2014 and will end June 30, 2015.
William Ford, the city of Worcester Assessor said, “In Massachusetts, the first two tax bills are estimated. They are 25 percent each of the prior year’s tax. For example, let’s say the tax is $4,000 in 2014. Your first two payments are $1,000. After the council votes, your taxes go to $4,400. The $2,000 you have already paid is credited against the $4,400. The remaining $2400 is broken down into two payments.”
As far as income tax during the calendar year goes, Ford said “The IRS goes off of payments made. If you make your payment for January in December, that payment is credited for this year towards income taxes. The only thing the IRS looks at is payments during the year. They don’t break it down by what its credited towards."
What Else Can Be Done to 'Close the Gap'?
The city of Worcester stresses 'closing the gap' between personal real estate taxes and commercial real estate taxes. However, Worcester residents think the city can do more to lessen the tax blow.
"As the owner of a two family home in the city, I find it frustrating that the rate goes up. I certainly understand trying to close the gap of residential and commercial rates. However, what's even more frustrating is the amount of some pilot payments made to the city by some of our colleges. They all need to step up and give something more in exchange for the tax exempt status they've been granted. The rates for a homeowner in surrounding towns are more attractive," said Michael Ricardi, a Worcester resident.
In 2013, Worcester had the second highest residential tax rate of $18.58 per $1000 of valuation, trailing only the town of Paxton.
According to the Worcester Research Bureau, "28 % of Worcester land is not taxable. Of that amount, 52% is owned by the City of Worcester, the US Government, and the Commonwealth of Massachusetts and 48% by non-profit institutions such as hospitals, colleges, and museums. At present, the Commonwealth makes a small payment to Worcester to compensate the City for State-owned, non-taxable property. The State does not reimburse the City for the value of buildings on State property."
City Councilor Morris Bergman said, "We can’t keep pinning the commercial and residential land owners against each other without including a major factor in real estate which is the ownership of property by non-profits."
Ricardi said, "I think any municipality can always make easy spending cuts in an effort to lessen the blow. And I don't mean layoffs but belt tightening everywhere. We taxpayers are always forced to do it."
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