Hidden Link

April 12, 2024

By Gintautas Dumcius and bruce mohl

Worcester property tax base is inverse of Boston’s

Fifteen years ago, Worcester looked at Boston with jealousy as cranes dotted the capital city’s skyline, adding new office towers. But now, with more and more people working from home post-pandemic, jealousy has given way to relief. 

Boston, with an operating budget that is heavily reliant on property taxes, is facing drops in the value of commercial offices. Commercial and industrial properties make up 58 percent of the tax levy, while residential taxpayers make up 42 percent.

Forty miles west, Worcester has a split that’s essentially the inverse, and as a result a commercial tax base “well positioned to navigate this shift through remote work,” according to Paul Matthews, the CEO of the Worcester Regional Research Bureau.

His group recently issued a new report taking a look at the city’s commercial real estate sector and US Census data. “Worcester has had a lower incidence of remote work than Boston, though more people commute to work outside Worcester than Boston (75.5 percent of Boston workers report working in the city, compared to Worcester’s 52.9 percent),” the report noted.

“Although remote work in Worcester is lower than in Boston, the growth of remote work could affect commercial values,” the report added. “The use of space plays a role in assessments, so if space is not being used, assessments, and therefore tax revenues, will decline, necessitating cuts in other areas.”

In Boston, the possibility of steep declines in commercial real estate values has touched off a budget debate.

A newcomer nonprofit, Boston Policy Institute, issued its own report earlier this year warning of a huge budget problem as a result of remote work. Mayor Michelle Wu’s administration has criticized the report as misleading, while pitching a home rule petition that would allow the city to shift more of the property tax burden on to commercial property owners and block spikes in homeowners’ tax bills. 

The home rule petition, similar to the one Mayor Thomas Menino muscled through Beacon Hill in 2004 in the aftermath of the dot-com bubble bursting, also allows other cities and towns to opt into a similar tax shift. Communities will get a better sense in late summer or early fall if commercial values dip or start to crater.

But places like Worcester aren’t champing at the bit to take advantage, similar to 20 years ago. “That conversation has not come to light here, because if you look at the residential property tax element here, it’s a much more significant element of local revenue than it is in Boston,” Matthews said.

There is agreement, however, on a potential solution: more housing, which would bring more foot traffic. “One way to ameliorate this problem, though not completely solve it, is to build more mixed-use housing that would allow residents to interact with retail,” the Matthews report said.

Another Mariano missile

Speaker Ron Mariano said a key reason the House’s proposed budget invests record amounts in the MBTA is because of growing confidence in its general manager, Phillip Eng.

“The last couple of folks at the T came out of the philosophical think tanks of the Pioneer Institute and a number of other places,” Mariano said. “We [now] have a train man, a man who can walk the tracks and not get electrocuted. It’s a gentleman we feel is going to make an impact. We’re excited to work with him as he makes changes.”

Eng, of course, is most definitely a train man, having spent 40 years working in New York transit and transportation agencies. Eng’s predecessor, Steve Poftak, previously worked at the Rappaport Institute at Harvard and the Pioneer Institute and had little hands-on experience in transportation other than serving as the vice chair of the MBTA’s oversight board.

But Mariano’s missile about Poftak misses some important context. Poftak grudgingly took the GM job in 2018 at a time when no one wanted it because his predecessor – businessman and non-train man Luis Ramirez –  was a disaster who was sacked after just 15 months on the job.

Poftak, who became the fifth GM in three years under Gov. Charlie Baker, steadied the T initially and then had to contend with the pandemic. Former US transportation secretary Ray LaHood, who headed a panel that in 2019 was highly critical of the safety culture at the T, praised Poftak in 2022.

“I believe, right up to the point of COVID, he was doing a good job,” LaHood said. “He was carrying out the recommendations. He was trying to implement the safety culture that I’ve talked about. Then COVID put an end to all of that.”

Former GOP candidate for governor says ‘adios’ to Mass.

Since losing the GOP primary for governor in 2022, Wrentham businessman Chris Doughty has stayed involved in party politics, backing candidates like Peter Durant for state Senate and Shaunna O’Connell for mayor of Taunton.

But he and his wife Leslie are now taking a step back, and a flight to Buenos Aires. In an email to supporters sent Thursday, Doughty wrote that they were approached by their church, the  Church of Jesus Christ of Latter-day Saints, to serve as volunteers for three years in Argentina.

“It was not an easy decision to put our pursuits on hold for a few years and leave our home, friends, and family,” they wrote. “At the same time, we have felt a strong desire to contribute where needed and accepted the request.”

Doughty, who served as a Mormon missionary in Argentina in the early 1980s, said they’ll be joined by 180 other volunteers from their church. 

In the email, Doughty couldn’t resist a parting dig at the two other candidates for governor in 2022. He wrote that he predicted the GOP candidate who beat him for the gubernatorial nomination, Geoff Diehl, would be defeated in a “landslide (which he was) and the Healey Administration would quickly embark on their promise of overspending and overtaxation (which they have).”

“Although I still feel the sting of our loss and I continue to worry about the declining quality of life in our Commonwealth, I take comfort in knowing that together, you and I, stood on the right side of history in that election,” Doughty said.