There are financial problems in Boston that caused Mayor Michelle Wu to propose raising property taxes. She wants to increase property taxes. The city data shows a 99% collection rate, so the financial problems are not caused by unpaid real estate taxes.
Unlike New York City, Boston's unpaid real estate taxes are only $6.35 million for FY23. A Bloomberg report says New York City is expected to have overdue property taxes increase to over $880 million by the end of the fiscal year in June. According to city data, Boston's unpaid real estate taxes are only $6.35 million in FY23.
The mayor's office says that the $6.4 million of outstanding collections is only 0.2% of the $3 billion FY23 property tax revenue budget.
The provided data shows three years' worth of unpaid property taxes, also known as 'current tax liens.'
Although the numbers are low compared to New York, unpaid property taxes in Boston increased year over year from 2021 to 2023.
In 2022, unpaid property taxes totaled just over $6 million, and in 2021, it was roughly $5.67 million, showing an increase of 4.9% from 2022 to 2023, and nearly 12% from 2021 to 2023.
The city attributes its high collection rate to continuously reaching out to taxpayers proactively.
Overdue property taxes are noticed many times throughout the year, according to the mayor's office.
Boston faces a budget shortfall of more than $1 billion in five years due to declining office values eroding the commercial tax base, as reported in February by Boston Policy Institute and the Center for State Policy Analysis at Tufts University.
The report predicts a cumulative revenue shortfall of $1.2-$1.5 billion over the next five years due to declining commercial property values, leading to an annual tax collection decrease of roughly $500 million starting in 2029.
Mayor Wu's spokesperson disagrees with the report, saying a decline in commercial property values leads to an increase in the tax rate for residential taxpayers, not a revenue decrease.
The report presents two options for the city to address declining commercial revenue: increase taxes for residents by roughly 30% or cut the city budget by 10%, with the Wu administration rejecting the latter.
Instead, Mayor Wu proposes a home rule petition before the City Council to allow municipalities to shift more of the tax burden from residents to businesses, exceeding the state cap of 175% up to 200% in the next fiscal year.
The proposal, similar to one suggested by Mayor Thomas Menino and made into law in 2004, would need approval from both the Council and state lawmakers. It was sent to a council committee this week for further discussion.
While Wu says the changes would not affect the business community negatively and property taxes for businesses would still decrease, it has proven to be unpopular among the commercial sector. opposition to the proposal has already emerged from at least one city councilor.
