Who pays commercial taxes in Worcester, don't you want to know?
Straight out of the Worcester Business Journal, here are our top 10 taxpayers. What do we see here? A group of taxpayers who can't leave no matter how high we raise the commercial tax rate. If anyone follows WorcesterMulti, they know that I complain all the time about how the dual tax rate (Residential taxpayers pay $15.22 per $1000 and commercial pays $33.34 per $1000). So, on a $1 million property, residential will pay $15,220 and commercial will pay $33,340 a year in taxes. And, I continue to say that this is killing the commercial tax base by forcing/encouraging investors to convert their buildings/properties to residential uses to save on taxes. We see this by the choices developers make in building residential, not commercial development. Why own commercial property? I guess since you have to. Let's delve into the data.
Top 10 Taxpayers Overview
Of the top 10, only 1 of these is residential, #10, which is 145 Front Street, assessed at $74 million and taxed at $1.2 million. Let's look at #s 5, 6, 7, 8, and 9, all of whom have lower assessed values and pay more in taxes. Look specifically at #9, Reliant Medical Group, who is assessed at half that value ($39 million) and is taxed at the same $1.2 million.
Utilities and Medical Entities
Of the top 10, 4 of these can never move since they are utilities, and they simply pass the taxes back to the residents in the form of higher rates:
National Grid
NSTAR Gas
New England Power
Verizon
Of the top 10, 2 are medical entities (#3 St. Vincent's Hospital and #9 Reliant Medical Group). Once again, these entities pass through to the end user. However, they are at a disadvantage to UMASS Medical Group, which, as you can see, doesn't pay taxes.
Other Taxpayers
Who are the other 3 we haven't discussed?
#4 Hannover Insurance Group, who pays $2.4 million in taxes
#5 AbbVie Inc., who pays $2.4 million in taxes - THANK YOU FOR STAYING
#6 Lincoln Plaza - Target, Lowe's, Stop and Shop - and don't forget Dick's Sporting Goods and Barnes & Noble, who went out of business. This property was so bad they basically got it for free in 2000 when it was demolished.
Why are these businesses having trouble? Probably because the rents have to be so high to support the $1.9 million in commercial taxes.
Comparative Analysis
Why did they tear down the movie theater? Not because people from Worcester don't go to the movies, but rather the taxes were too high for the value of the land, which is now used for residential housing at the lower tax rate.
Let's compare Lincoln Plaza, assessed at $62 million and taxed at $1.9 million, with The Shoppes at Blackstone Valley in Millbury, MA, down the street, which is assessed at $109 million and taxed at $14.45 per thousand for a tax of $1.6 million.
It is nice that these taxes are being paid, but if we keep the tax rate on commercial property at twice as high as residential properties, Worcester will become the bedroom community to the suburbs, where jobs are located, and everyone will have to commute out of Worcester for their jobs and services.
Ask your City Counselor to reduce this disparity.
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