Chelmsford’s Shift to Split Tax Rate Splits Town Meeting Reps
CHELMSFORD -- A long-overdue change to provide tax relief for residents, or a terrible decision that will harm the town’s businesses?
Town Meeting precinct representatives are split over the Board of Selectmen’s December vote to split the tax rate for the first time in 20 years.
Precinct 7 Rep. Philip Stanway said he’s been for a split rate from the start.
“It was one of the reasons I supported candidates last election cycle and will again this next cycle,” Stanway said. “I did not get a tax break from the government or a raise from my company, so even this small savings on my taxes is important.”
Precinct 3 Rep. Steve Flynn, who has been outspoken in his support of the split rate, said he felt it was long overdue to give residents, especially the large number of seniors on fixed incomes, some relief on their taxes.
For 20 years, the single rate did nothing to attract business, he said, and he believes the split rate won’t matter as much to large corporations as location and their ability to make money here.
“They wouldn’t even bat an eye at this,” Flynn said. “You’re going tell me Walmart or Kohl’s is going to move out of town because of tax classification?”
He said he worries how future iterations of the Board of Selectmen will handle the issue, and believes they will contend with an uproar from residents if they attempt to go back to a single rate.
Precinct 9 Rep. Danielle Evans said she’s “disappointed and discouraged” by the board’s decision.
“I believe it was irresponsible at this time fiscally to do this,” she said.
Evans said she feels the town doesn’t have a large enough commercial base to sustain a split rate, and she finds the decision at odds with other efforts to attract business, including hiring Director of Business Development Lisa Marrone.
She said the Board of Selectmen is sending mixed messages to current and prospective businesses, when what the town needs is a “coordinated, well-thought-out, effective approach.”
Evans said she understands it’s within the board’s purview, but she wishes the matter could go before Town Meeting, even if just for an advisory vote. Evans said she worries what effect the increased taxes will have on the abilities of small business owners -- who have up to now been very generous -- to support school groups and nonprofits in town.
“I understand why it was done, but I regret it,” Precinct 5 Rep. Maureen Foley said. “And if I had to vote on it, I would have opposed it.”
Foley said she’s concerned about how it will impact small businesses, particularly those with opportunities to grow that might hesitate to stay in town because the growth would trigger higher taxes. Still, she said she remains optimistic that residents will support local retail and service businesses.
Precinct 7 Rep. Clare Jeannotte, who previously served as a selectman and Finance Committee member, said her mind has changed on the issue over the years.
As a selectman from 2007 to 2010, Jeannotte said she voted three times to keep the single rate. But after 20 years of listening to arguments that a single rate helps to attract and retain business, she said there has “never been any real, solid evidence that this was bringing business into town.”
“I’m tired of waiting for the economic development boom to come to provide residential relief,” Jeannotte said. “It’s just never been here.”
Because Chelmsford hasn’t found a way to provide residential taxpayers relief through a smaller budget, raising other revenues or using free cash (surplus funds from the previous year) to reduce the tax levy, she said, shifting some of the burden to the commercial, industrial and personal property classes is the only option.
Jeannotte acknowledges it’s very hard to back off from a split rate once it’s in place, but hopes selectmen will carefully consider property value assessments and rates when the decision comes before them again. She said she feels selectmen would benefit from a recommendation from the Board of Assessors, which through now has declined to provide an opinion in any direction.
“Just because it’s always been that way doesn’t mean that’s the way it should stay,” Jeannotte said.
Precinct 1 Rep. Joe Ready called the move to a split rate “a horrible decision.” While residential property taxpayers see slight decreases in their taxes, business owners are seeing significant increases, he said.
Ready compared his own bills as an example. For the most recent quarterly bills that went out, the taxes for his home went down $130, but the taxes for 8 Chelmsford St., which houses his Ready Real Estate, went up almost $500, he said.
On top of that, businesses get hit twice because of personal property taxes, Ready said.
“You don’t pay for the big screen TV in your house, but in my business I have to pay for every printer, every desk, every piece of equipment I own,” he said. “In the liquor store (Vinal Square Craft Beer House & Premium Liquors), I have to pay for all the liquor sitting on the shelves.”
Ready said he believes the split rate will result in lower commercial property values, and he’s curious to see how it affects smaller businesses that rent storefronts with triple net leases -- and whether they’ll stick around after their leases are up.
Jim Clancy, a Precinct 2 rep and chairman of the Finance Committee, said he understands the arguments on both sides.
“I’m happy the residents are seeing at least a temporary shift in their taxes, because it has been burden on people, and I understand the pressing concerns,” he said. “But without a strong commercial base, we’ll be playing catch-up again in a couple years.”
If the commercial base dips lower than the current 18 percent, the balance will be covered with increased residential taxes, Clancy said. If it becomes too burdensome the town would have look at decreasing spending, but that is difficult when the budget is already tight, and there’s only so many reductions that can be made before services are affected, he said.
Clancy also expressed concern with the “artificial” increases and decreases that can be seen in the third- and fourth-quarter tax bills that went out after the rate was split in the middle of the fiscal year, noting the differences would be more pronounced to make up for the first two quarters.
Precinct 4 Rep. Brian Latina, who supports the split rate, said the town had a single rate for so long because of control exerted by the local business community via the Chelmsford Business Association.
Latina, who works in logistics, said he’s had to relocate warehouses all over the country, and not once did his employer ask about tax rates.
“It was location, location, location. We did not make any decisions based on taxes,” he said. “We looked at highway and truck access. We looked at access to buildings where employees live. That was way more important than paying another $10,000 in taxes.”
Latina said many small businesses are already enjoying tax breaks thanks to President Donald Trump’s tax plan that allows certain income deductions, and those that qualify for the town’s small business exemption get a 10 percent break on their property taxes -- benefits that aren’t open to residential taxpayers.
Residents also have to pay other costs that aren’t factored taxes, such as school parking, athletic, club and bus fees, he said.
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