With millions extra in new growth, City Council lowers residential taxes by nearly 2%

WORCESTER — Presented with two alternatives for using extra new growth money, the City Council voted 7-4 Tuesday to keep residential taxes as low as possible while allowing for more than $2.7 million in extra growth to be used for capital investment.

Councilors approved a residential tax rate of $13.75 per thousand for residential properties and $30.04 per thousand for commercial and industrial properties.

According to city Assessor Samuel E. Konieczny, the rates translate to a 1.98% decrease on an average single-family residential tax bill ($5,103) and a 0.49% increase to the average commercial and industrial tax bill ($36,067).

Worcester has a dual tax rate, with different figures for residential properties and for those classified as commercial/industrial. The rate for the latter category is higher. Each year councilors vote on how the tax burden should be divided.

The city recorded more than $4.7 million over its prior fiscal 2024 estimate in new growth: $11,218,255 compared with the estimate of $6.5 million.

The city presented City Council with two alternatives and two corresponding tables of possible tax rates: The first alternative would have used all additional new growth to alleviate the tax burden and the second used $2 million of additional new growth to address the tax burden, with the rest going to capital investment goals.

The extra $2.7 million in additional growth would be used for the following goals: $1 million for the fire stabilization fund, $1 million for a new school capital maintenance fund for deferred maintenance needs in schools and $718,255 for the new high school stabilization fund.

The City Council unanimously selected the alternative that left money for capital investment goals.

Multifamily housing

While the average single-family residential tax rate decreased, the average rate for three-family properties was bound to increase regardless of the City Council's choice. Councilor-at-Large Morris Bergman said doing what he could for the burden on two- and three-family households was why he supported the lowest possible option.

"I have to...take the least amount of pain out of the two- and three-family property owners," Bergman said.

With the lowest possible residential rate for the second alternative, the average three-family residential bill still increased 5.6% to $7,209.

Councilors-at-Large Khrystian King and Donna Colorio agreed with Bergman.

Colorio, who brought up her longtime opposition to the city adopting the Community Preservation Act due to additional property tax, said she believed going further than the lowest possible residential rate would make it harder for residents to stay in Worcester.

King said that the city needs to work to keep its workforce within Worcester by not having them priced out of the city and that those residents can help businesses with their patronage.

"Our employees are economic drivers. They're also more reliable when they can afford to live here and they also become reliable patrons of our small businesses," King said.

Councilor-at-Large Kathleen Toomey proposed a rate of $14.03 per thousand for residential and $28.99 per thousand for commercial, which she said would help small businesses working through their first years while raising the average residential bill by a dollar.

"It's incredibly important that we do something to encourage new growth and maintain our existing businesses, as well as our homeowners," Toomey said.

The $14.03 rate failed, 9-2, with Toomey and Mayor Joseph M. Petty voting in favor.

District 1 City Councilor Sean Rose, chair of the Standing Committee on Economic Development, proposed a rate of $13.90 per thousand residential and $29.47 per thousand commercial. Rose said he looked to strike a balance between residents and businesses.

"It's a line item where both our residential and our businesses both save and both win with this particular tax classification," Rose said.

The $13.90 rate failed, 7-4, with Rose being joined by Toomey, Petty and District 4 City Councilor Sarai Rivera.

The lowest residential rate of $13.75 per thousand was approved, 7-4, with Bergman, King, Colorio, Councilor-at-Large Thu Nguyen, District 2 City Councilor Candy Mero-Carlson, District 3 City Councilor George Russell and District 5 City Councilor Etel Haxhiaj voting in favor. Petty, Toomey, Rose and Rivera voted no.

The vote breakdown was the same as last year's tax hearing.

Delayed items

In addition to the annual tax classification hearing, votes to adopt the city's recommended policy allowing accessory dwelling units and to send the city's recommendation to lower the statutory speed limit from 30 mph to 25 mph to committee were delayed by Bergman and Colorio, respectively.

This article originally appeared on Telegram & Gazette: Worcester City Council lowers residential taxes by nearly 2%