NORTH ADAMS, Mass. — The Finance Commission voted Thursday to recommend a property tax breakdown of 1,715, countering the mayor’s request to max out on the business side.
The City Council, however, wasn’t convinced this was the right move, especially after years of trying to narrow the “absurdly high” gap between residential and commercial rates.
The proposed residential rate would be $17.46 and the commercial rate would be $38.35 for a $1,000 valuation, both down about $1 from last year. The average homeowner would see a tax bill of $3,400 and the average business, $16,649. The shift would go from 1.68 to 1.75, returning to what it was in 2012.
“My main argument against this is that our commercial tax rate is already, to me, absurdly high compared to our residential rates,” said committee chair Keith Bona. “So … saying that the commercial rate or the commercial bill is going to go down, is kind of like saying that when gasoline was $3 and went up to $6, it went down to $5.75 and you should be happy.”
More than a dozen people attended the committee meeting, including several small business owners who agreed with the committee members’ argument that a high trading rate was a burden on small businesses.
“We’re the third highest in the state and I think it’s embarrassing and I think it sends a really negative message about our willingness to support small businesses and encourage new small businesses,” said Rye Howard, owner of Bear and Bee Bookstore. in via Holden.
The projected drop in commercial bills looks good but hides the fact that the rate is so high to begin with, they said. “There are scenarios where I could buy [the building the store is in] and I would pay more taxes than I would pay the mortgage. … It feels bad.”
North Adams has had the third highest commercial rate in the state after Pittsfield and Holyoke for the past two years. Conversely, it has among the lowest residential tax bills in the state: It was 15th lowest last year and 12th lowest the year before.
Lincourt provided data on two local businesses, one large and one small, that show they would see their taxes decrease by between $30 and $200 even at the top shift.
Macksey described the proposed rates as a win-win.
“We were looking to minimize the amount of impact on residents. That said, we also felt this was a good time for the commercial property and personal property portion of our portfolio to see a reduction in the tax rate as well,” he said. She said.
Committee members countered that companies pay more in terms of utilities, rent, loans, staff, inventory and equipment, etc.
Higher tax rates and lower property values are not conducive to attracting bank finance for start-ups and expansions, Bona said, and committee member Lisa Blackmer said they need to look at the “big picture.”
“I’ve heard the struggles of businesses that have been closed during the pandemic or closed part of the time. That’s part of why their values have gone down and why personal ownership has gone down, why they don’t have the money to invest,” she said.
The North Adams Chamber of Commerce sent a letter to the mayor and councilors expressing “strong disagreement with such a significant change in charges and our deep concern about what this change means both materially and perceptually, for existing and potential businesses a North Adams.”
The city is seeing a spike in closures, downsizing and relocations, the chamber council said, adding that many businesses are hesitant to speak up at the risk of losing customers.
“Unlike flat-rate communities, these formulas consistently disadvantage businesses that are already significantly burdened with additional expenses that residents do not face,” the council wrote, adding that the tax shift “simply does not it’s effective for the kind of robust and thriving business community we all hope to cultivate here.”
Jessica Sweeney, owner of Savvy Hive on Main Street, said she owns residential and commercial real estate in the city.
“It’s really hard to pay taxes as they are right now and I’m constantly having to choose between paying people to work in my shop or paying my own taxes,” she said. “A lot of people come to me about opening businesses and they look at that rate and they’re like, no, it’s not worth it.”
Committee member Bryan Sapienza said it’s hard to buy anything in North Adams, even clothes.
“We had JC Penney, we had brands, we had other stores in the area,” he said. “We want to try to attract business and with a high tax rate, you’re not going to get those bigger stores.”
The city also needs specialty shops and family-owned businesses, he continued. “Those types of stores have brought people and are just as important as major stores.”
Bona said it is difficult to attract business and jobs when rates in surrounding communities are much lower. Adams set a commercial rate this year of $25.65.
“I think a strong business community is a healthy community all around,” Bona said. “I don’t want residents to go to Bennington or Pittsfield for services, I want them here.”
There was some back-and-forth between committee members and the mayor, who was participating remotely from out of state, over the budgeted tax levy.
“We’re not trying to attack companies that we want to grow our businesses, but we’re also sensitive to the residential base. And again, this is a year where we could comfortably leverage both sides,” Macksey said.
Councilman Wayne Wilkinson, who attended the meeting, said he could not support a move above 1.72 and preferred 1.68. He also implied that the mayor was courting votes for next year’s election, which the mayor has strongly refuted.
“I always try to do the best and operate in the best interest of the city, which includes residents and businesses,” he said. “Right now, I feel strongly that 1.75 is the best.”
Blackmer suggested that the committee split the difference between 1.68 and 1.75 by recommending 1.715. This was proposed and approved unanimously.
Lincourt will have the new figures for next week’s city council meeting. The residential rate will be approximately $17.67 and the commercial rate approximately $37.59.