FITCHBURG — In an effort to support business growth in Fitchburg, the City Council on Tuesday voted 8-2 in favor of adopting a single tax rate to shift the tax burden from commercial and industrial properties to residential properties.
Eight councilors favored the new rate, saying that it will make the city more attractive to businesses in the long run.
Two councilors opposed the move, arguing that residents should be protected from large increases.
This vote means the owner of the average single-family home can expect to pay $194.62 more in taxes. Had the council approved the same rate calculation as last year, taxes would have increased by only $127.28.
Businesses and residents will now be taxed at the same rate, at $19.72 per $1,000 of assessed valuation.
The new tax rate means the average industrial property will pay $670 less in property taxes this year, and the average commercial property owner will pay about $390 less.
Last year, the City Council voted to adopt a tax rate that was about 6% shy of a true single tax rate. The move was seen as a gradual progression toward adopting the single rate.
Under the city’s previous split tax rate, commercial/industrial taxpayers would be paying a disproportionate share of the city’s taxes, officials said.
At-large Councilor Marcus DiNatale said that while the average annual increase would be $194.62, the amount is the smallest annual average increase since fiscal year 2015, when the rate increased by $344.63.
“Every single year prior to this year, we’ve seen increases north of $300,” said DiNatale. “This year the increase is 36% less than it was last year.”
DiNatale stressed that the single tax rate is not the “cure-all” for the city’s financial woes, but a necessary step in that direction.
“A single tax rate is one tool to incentivize and encourage business growth and retention which only helps the homeowner, and after 12 years we finalize reached this milestone,” DiNatale later said on social media. “For decades the dual-tax system has failed the city, assisting in driving businesses out, hurting homeowners.”
Ward 3 Councilor Joel Kaddy, a local business owner went as far as calling the split tax rate “the most unfair tax system we’ve ever had.”
Ward 2 Councilor Paul Beauchemin passionately advocated against shifting the tax rate. He said shifting the burden to the residents was an unfair and unreasonable move by the council.
“You tell the public that if we have a single tax rate, it’s going to do wonders,” said Beauchemin. “The only thing it’s doing wonders for is these (businesses) can write off the taxes. A single family home can’t write it off.”
Beauchemin said he would only vote in favor of keeping last year’s tax rate.
At-Large Councillor Sam Squailia, who was also in opposition, said she agreed that the shift needs to happen but it should be done over a longer period of time.
“We’re all in agreement in moving toward a single tax rate, I think the only thing that we disagree on maybe is how quickly we get there,” said Squailia.
She said residents feel they are already being taxed too much each year, and that the shift would represent another unfair burden on them.
At-Large Councilor Anthony Zarrella said the idea is to incentivize businesses, grow the tax base, and to eventually knock down taxes for residents in the future.
Roy Nascimento, president and CEO of the North Central Massachusetts Chamber of Commerce, spoke during the meeting in support of shifting the tax burden.
“Making the decision to gradually move towards a single tax rate is the right decision long-term for the city,” said Nascimento. “Making the commercial tax burden more competitive will position Fitchburg to attract new business and investment, retain existing businesses, increase tax revenues, and change outdated perceptions that the city is unfriendly to business.”
Chris McDermott, the chamber’s public affairs manager, also spoke in support of the new tax rate.
McDermott said Fitchburg made a huge mistake nearly four decades ago when it decided to move toward a split tax rate, making it one of the only municipalities in the county to do so.
“Businesses took this decision as a sign that the city was indifferent to their needs and concerns,” he said. “Many who already resided here relocated while those considering building here decided against it.”
McDermott said that the move toward single tax rate, when coupled with the city’s recent business-friendly policies, is proof that Fitchburg is welcoming to businesses.
Assessor Christopher Paquette said the numbers prove that the city has been heading in the right direction financially in recent years.
Growth was strong, he said, adding that this year there was an additional $30.4 million in taxable value to the city. Paquette said there was also a roughly 10% increase in the city’s overall value.
Single-family tax bills continue to remain the lowest among the surrounding communities, said Paquette. Multi-family home value also increased, he said.
Councilor David Clark was absent.
