GREENFIELD — The Franklin County Chamber of Commerce has called on the mayor to veto the split tax rate passed by Town Council this week, saying more public input is needed, while some local business owners say they feel blind-sided and concerned by the change.
In a letter to Mayor William Martin, the chamber’s board of directors unanimously requested the veto, arguing that more time is needed for public input, analysis and dialogue, a sentiment that some members of the business community echoed, noting the idea was raised two days before the council’s meeting, leaving no time for significant discussion.
The split tax rate will result in higher taxes for nonresidential property owners, including commercial, industrial and personal property, but is expected to save the average residential taxpayer $740.
“The sense was that we have new businesses and residents in town, including myself, who would have appreciated the opportunity to learn more about the split tax proposal and be heard. I think the it’s the process that we find concerning here,” said Natalie Blais, executive director of the Chamber of Commerce.
The mayor could not be reached for comment by press time.
At the Garden Cinemas, owner George Gohl is concerned about the impact higher taxes could have on his business. Although Town Council passed a small commercial exemption aimed at lessening the burden on small businesses, many local merchants are unsure whether they qualify, and if so, how much it will help.
The small commercial exemption lowers taxes on parcels occupied by small businesses and shifts those taxes to other commercial and industrial taxpayers. The exemption only applies to businesses with 10 employees or fewer with a value of less than $1 million. It cannot equal more than 10 percent of the value of the parcel, according to Massachusetts General Laws.
“We’re talking like a $7,000 or $8,000 increase in my property taxes between the building and the cinemas, that’s quite a hefty chunk of change to pay for,” Gohl said. “As a business here, we’ll give serious consideration to increasing our ticket prices and we’ll also give serious consideration in cutting our expenses. “Unfortunately in our situation, we’ve pretty much cut our payroll to the bone, and I think a lot of businesses in the area have cut their payrolls to the bone, so there’s not a lot of leeway anymore.”
And with a potential increase in minimum wage to $15 an hour, Gohl said businesses could be further hurt.
“I’ve got the feeling there’s going to be a lot of price increases over the next year while businesses go through and see what they can cut, see what they can increase,” he said. “One of the sad effects is probably nonprofit organizations are going to feel a little bit cut, too, in that businesses will have to manage their charitable donation expenses.”
Gohl, like other local property owners, said the change was not one that should have been decided in an hour of discussion on the council floor. He would have rather seen the council and the mayor put together a committee to explore the idea further.
At the Greenfield Gallery on Main Street, owner Rachel Katz — who also owns the building — is unsure how her business will be affected. But for Katz, the bigger issue is the way in which the council made its decision.
“Speaking to the politics before the actual policy, I think it was rushed through with no thought,” she said. “It felt a whole lot personal more than it did important policy, and I am extremely disappointed it was pursued in that way.”
Katz believes the hike will hurt low-income renters and businesses in town. Like Gohl, she’s unsure whether her property will fall under the small commercial exemption. If taxes do increase, she said that will translate directly through to her and many other Main Street businesses.
“None of us are flush with cash and sitting on piles of money. Being an entrepreneur is a lot of work, it’s a labor of love, and we will lose business on Main Street if their rents are increased because of the tax change, that’s the long and short of it,” she said.
Katz also noted that two downtown businesses recently moved to Turners Falls and more will likely follow. She said it’s frustrating to see this type of roadblock when downtown Greenfield has made so much progress in recent years.
Timothy Grader of Holyoke Property Management, who owns 278-302 Main St., said although the tax increase will not result in higher rents for his tenants immediately, it will eventually get built into the overall pricing of the market.
Grader’s property houses Burning Heart Yoga Studio, the Massachusetts Virtual Academy, Tapestry Health and a number of other offices and businesses.
“We do business in other communities where there is a split tax rate, and there are business associations in those communities that view it as a real detriment that makes it really difficult to attract businesses,” he said, adding the council’s decision could have benefited from more study by the town.
While Council Vice President Isaac Mass said before the council’s vote that residential taxpayers can use the money they save to support local businesses, Grader said in his experience, that typically doesn’t happen.
“I would imagine some of the retailers on Main Street have a tax clause in their leases — then the tax increase will be directly passed onto the retailers — and I think that was a point the Town Council missed,” he added.