Children's concert at Franklin library
Franklin's Tri-County joins 'green' program
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Councilors could have shifted the burden to commercial properties by adopting a split tax rate. But, that could result in higher residential taxes next year because the values of commercial properties are dropping quicker than residential ones, said Chris Feeley, a member of the Board of Assessors.
"If in fact we had a dual tax rate last year, the residential rate would have gone up dramatically more," Feeley said. "The town by most standards does not have a big enough industrial or commercial base to warrant a dual tax rate."
Town Council Chairman Scott Mason said that was the most convincing argument to adopt a single tax rate.
Shifting the tax burden to commercial properties would also drive away businesses, especially small companies already battling increasing health insurance costs, said Jack Lank, president of the United Regional Chamber of Commerce.
"If you go with a dual tax rate, you might as well go up on 495 and put a sign that says Franklin is not business-friendly," Lank said.Read the full article in the Milford Daily News
Jessica Strunkin, manager of public policy and public affairs for the 495 MetroWest Partnership, said she would like to see businesses and government work together to solve the problem.
"I think some type of collaborative approach would be more efficient," Strunkin said after the meeting. "Everyone can pool their resources and it might cost less."
Jack Lank, president of the United Regional Chamber of Commerce, said public outreach will be key to coming up with a manageable funding plan.
"I think (a stormwater utility) is almost inevitable," he said after the meeting. "No matter how we look at it, this is an unfunded mandate and we're going to be footing the bill."Read the full article in the Milford Daily News
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To determine the economic impact of adopting a split-roll property tax, one must explicitly take account of how the split roll would affect the behavior of individuals and businesses who own commercial property. A wealth of economics research has demonstrated that, when confronted with an increase in state taxes, businesses seek to avoid their exposure to the higher tax. Taken together, these studies indicate that a 1 percent increase in state taxes will lead to a 0.25-0.31 percent reduction in the level of economic activity. If the reduction leads to corresponding decrease in employment opportunities for Californians, a 1 percent increase in taxes would result in the loss of about 43,000 jobs.
The economic impact of an increase in the taxation of business property depends on the extent to which affected businesses can pass-on the tax to their customers (through higher prices), renters (through higher rents), their employees (through lower wages), or their suppliers. If a firm cannot pass-on the tax to others, it may change its mode of operations to use less taxable property (capital goods, for example) or relocate its operations to other states. Either way, much (but not all) of the burden of higher taxes will be borne by others. Generally speaking, owners of capital are more likely than landowners to avoid the increased tax burden by shifting their investments elsewhere. Capital is highly mobile; land is very immobile, and cannot be relocated to locations with a more benign tax system.The full report can be found here (PDF)
The property tax is actually two types of taxes - one upon building values, and the other upon land values. This distinction is an important one, as these two types of taxes have significantly different impacts on incentive motives and development results.
Pennsylvania's pioneering approach to property tax reform recognizes this important distinction between land and building values through what is now known as the split-rate or two-tier property tax. The tax is decreased on buildings, thereby giving property owners the incentive to build and to maintain and improve their properties, and the levy on land values is increased, thus discouraging land speculation and encouraging infill development. This shifting of the tax burden promotes a more efficient use of urban infrastructure (such as roads and sewers), decreases the pressure towards urban sprawl, and assures a broader spread of the benefits of development to the community as a whole.
Among 37 area communities between Newton and Shrewsbury, 13 tax commercial properties at a different, higher rate than homes. Having a split tax rate provides flexibility in raising revenue amid fluctuating real estate values, officials say, and eases the tax burden on residents. But for small businesses struggling in a sour economy, it can feel like a double whammy.
"It's a really delicate balance between taxation of residents and businesses," said Peter Bulian, a selectman in Needham, where the commercial tax rate rose 3.4 percent, from $18.92 to $19.56 per $1,000 in assessed value, for this fiscal year, while the residential rate went up 2.6 percent, from $9.70 to $9.96.
"Last year, we had a business district with 40 percent vacancies," he said, referring to the New England Business Center on Highland Avenue. "They were hurting, and landlords pass along tax increases to their tenants."
"This (meeting) is to keep the information flowing," Bellingham Town Administrator Denis Fraine said. "The proposed regulations are going to be costly, and the more we understand what our limitations are, the better it will be in the long run from a financial perspective."
Milford Selectman Brian Murray said the presentation is important for town officials and business owners, but efforts to fight the regulations need to continue.
"This is almost like the tail wagging the dog," Murray said. "It means we buy into these regulations, and I refuse to buy into the science of it and the unfairness of targeting three towns."