[Ed note: My Southborough accepts signed letters to the editor submitted by Southborough residents. Letters may be emailed to mysouthborough@gmail.com.
This particular letter is in rebuttal to a previous post sharing resident Carl Guyer's presentation asking residents to support a split tax rate.]
To the Editor:
At Town Meeting 16 & 17 April, residents will be asked to vote on a non-binding Article #24 in the Annual Warrant. The purpose of this Article is to influence Selectmen’s future vote for a Split Tax Rate for FY15. A vocal minority in Southborough has suggested that the Town should adopt a Split tax rate and tax business at a higher rate to reduce the tax burden on residential property owners. Part of the rationale for those who oppose the Town’s long-standing single tax rate is that increased business in Southborough will cause home values to decline. For a variety of reasons, we suggest that such an approach is misguided, shortsighted, and, in the long run, will undermine the character and financial well-being of Southborough.
First, a Split tax rate would put Southborough in the minority of Massachusetts municipalities and place our Town at an economic disadvantage. Of the 351 cities and towns in Massachusetts, more than two thirds (68%) have a single tax rate. Most of our neighboring communities have a single tax rate, including Westborough, Northborough, Hopkinton, Shrewsbury, Natick, Ashland, Holliston, Sherborn and Wayland. Area municipalities with a Split tax rate include Framingham, Auburn, Hudson, Marlborough and Worcester.
Second, adopting a split tax rate does not increase the gross tax revenues to the Town. It simply shifts the tax burden from one group to another.
Third, a split tax rate is detrimental to the short- and long-term financial stability of Southborough. Currently, business provides 19.35% (CIP – Commercial, Industrial and Personal) of Southborough’s total tax revenues. One of many benefits of growing our business tax base is that it will provide new taxes that will help to improve our core services, develop our infrastructure and help keep residential taxes manageable. In conjunction with fiscal prudence, the Town will create a sustainable model that encourages additional growth (with additional tax revenue) without the corresponding expenses that residential growth causes.
Fourth, property values are not driven by small variations in the proportion of a town’s commercial tax base relative to its residential tax base. Home values rise and fall as a result of many factors, including fluctuations in the financial and credit markets, interest rates, land values, location, the available housing stock, community quality of life and services, and most importantly, the quality of schools. Appropriately located business and commercial uses increase the desirability of a community.
Fifth, a Split tax rate asks our neighbors, friends and colleagues who provide jobs in our Town to bear a disproportionate share of the tax burden. Many of these jobs are held by other neighbors, friends and colleagues in Southborough. The business community in Southborough is a strong partner in the overall well-being of our community. Approximately 85% of the businesses located in Southborough are small. If a Spit tax rate is adopted, this would result in increased costs to our small businesses, making them less competitive and undermining their ability to prosper and to hire and retain employees. A Split tax rate also increases the risk that these businesses would leave Southborough altogether for a neighboring community with a single tax rate, such as Westborough or Northborough.
Julien Mininberg, President, Kaz, Inc. (125 employees) and John Beasley, Principal, Beals &Thomas (35 Employees) each indicated that they would “reconsider their leases in Southborough if a Split and unfair tax is implemented.”
The contributions our businesses and their employees make to our community are enormous. They provide critical jobs, products, and services that enhance Southborough’s quality of life. They provide leadership, make generous donations in money and time, help fund youth programs, and participate in our government by serving on key committees and boards. A healthy and engaged business community is crucial to our Town’s long-term sustainability. In a global economy, many of our businesses have a variety of options available about where to locate, invest and expand. While businesses may not vote at the ballot box, they will vote with their feet and take their goods / services, their employees and their property tax revenue to a more business-friendly environment. Many of their employees are residents of Southborough. If the employees of these businesses depart, there will be a critical loss of high quality jobs. It will also have a negative consequence on spending in our retail establishments and will negatively affect other companies within their particular industry cluster.
Finally, many communities with a Split tax rate have found that it undermines their ability to attract and retain businesses and causes higher taxes for residents in the long run. Framingham has one of the highest dual tax rates in the state. As a result, its businesses are leaving. In critical situations such as TJX, Framingham had to offer a Tax Incentive Financing Agreement to incentivize the company to keep at least one of its offices in town. Framingham’s residential property owners have been left to make up the shortfall. Since 2010, the residential tax rate in Framingham has increased 39% (from $12.83 to $17.84). During the same time period, Southborough’s single tax rate increased 17% ($14.06 to $16.54). Even with Framingham’s business tax rate more than double the residential rate, Framingham’s residential tax rate is still one of the highest in the state at $17.84 which is 8% percent higher than Southborough’s single tax rate of $16.54.
Similarly, in Worcester, Marlborough, Ayer, and Auburn, the Split tax rate has caused a high level of departures of existing business and turned many new businesses away to seek towns with a more favorable business climate and a single tax rate.
The Split tax rate has had a negative impact on tax collections, retaining and attracting business. In response, many of these communities are making progress to reduce the Split tax rate on business and in some cases return to a single tax rate.
From Governor Deval Patrick’s Office to many Boards of Selectmen across the Commonwealth, it is recognized that the business community is a vital partner in our towns and cities. They are a critical part of a team that enables our communities to grow, prosper, provide jobs, and give our families the resources to sustain our quality of life.
As we have for many years, and recently our Board of Selectmen, Dan Kolenda, John Rooney and Bill Boland, plus residents and businesses have supported the single tax rate in Southborough. Please join us in supporting the continuation of our single tax rate and vote No for the Split Tax Rate, Article #24 Annual Warrant.
Very truly yours,
Christopher Robbins
Southborough, Economic Development Team; Board of Directors, Corridor Nine Chamber of Commerce
chrisr2346@verizon.net