GREENFIELD — Mayor William Martin is urging the Town Council to postpone its vote on whether to split the property tax rate until further study can be done.
The request came in a letter to the council sent on Tuesday — one day before the council is scheduled to vote, for a second time, on whether to split the rate, shifting some of the burden onto commercial property and away from homeowners.
Earlier this month, the council voted 9-2 to split the tax rate with a residential factor of 1 and a factor of 1.5 for all other classes of property — including commercial, industrial and personal. But the vote was voided after the town clerk discovered that the wrong date was printed on the assessor’s public hearing notice for the meeting.
As proposed, the split would save the average residential taxpayer $740, but increase the tax rate from $23.27 to $34.79 for nonresidential property owners.
In his letter, Martin wrote that he agrees with the intent behind the council’s decision to adopt a split tax rate, but he worries there will be unintended consequences by proceeding without a formal study. He vetoed the council’s previous vote, which the town clerk said was already null and void, and said he will do the same if the council favors a split rate again tonight.
“Many of the properties this proposal impacts are rentals,” Martin wrote. “As presented at the last meeting, the assessor has noted that the tax increase could be over $200,000 per year for Leyden Woods. Who will pay for this increase? It’ll be the low-income renters.”
Martin added that commercial renters — most of whom are small businesses — have triple net leases that require them to pay the property tax, meaning they would have to absorb a direct tax increase.
“The split tax rate gives a tax break to the owners of high-value homes while forcing renters to foot the bill,” he wrote. “A tax break like this is regressive, as the biggest benefits go to homeowners who have purchased highest valued homes.”
Martin also said Greenfield’s reputation could suffer as the result of a split tax rate.
“Sometimes called anti-growth or anti-business, this accelerated council adoption of the diversion of paid taxes to commercial property owners without study, ample public notice and city provided information of the potential consequences solidifies this anti-growth idea,” he wrote.
Martin said most businesses budget for several years, and a “passing of the buck” to commercial and industrial properties will harm those budgets and could cause loss of jobs. He also noted that other communities, including Worcester, have struggled with the effects of a split tax rate system.
“In 2017, candidates for City Council are still debating the 1984 split tax rate vote — which has had real impacts, like an 18 percent decrease in industrial property,” Martin wrote. “Almost 35 years later, Worcester is still trying to correct this mistake.”
He urged the council to postpone implementing a split tax rate and pass a resolution to study the proposal further. Specifically, Martin requested the council create an advisory committee to explore the effects of a split rate and to commission an independent study to gain a full picture of the economic impacts.
Martin proposed the committee issue a full report to the community by June 2018 so the council can review it before setting the 2019 tax rate.
Town Council is scheduled to hold a public hearing and vote on the tax rate during its meeting tonight at 7 in the GCTV studio, 393 Main St.