The chances of Natick adopting a split tax rate in the near future are just slightly higher than those of the town rebuilding the Charles River spillway. But the Select Board pledged during the $7m override discussions last year that it would explore all avenues for cost savings and new revenue opportunities, and that has included a deep dive into single vs. split property tax rates.
“This board has been historically, fervently single rate and supported a single tax rate, and I think all of us still do” Board Chair Kathryn Coughlin said toward the end of the board’s latest discussion on this issue at its Sept. 2 meeting. “But we made a commitment to residents who asked us to consider this…”
Natick currently has a single tax rate—residential and commercial property owners pay the same rate ($12.17 per $1,000 of value). Some communities that have a larger commercial base charge organizations a higher rate than residents (see tax rates across Massachusetts communities). In Natick, residential property taxes account for a bit more than four fifths of the pie, and the Select Board will once again this November vote on what’s referred to as the “residential factor.”
The Sept. 2 Select Board meeting (starting about 14 minutes into the Pegasus recording) included a discussion on tax rates featuring input from a host of local businesses, including landlords. This followed a discussion from a year ago when Natick Mall and other large business reps shared their thoughts on split vs. single tax rates, not surprisingly seeking to keep a single rate. It precedes more sessions that will feature tax experts, reps from other communities, and more on the tax rate topic.
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The first business owner to speak at the Sept. 2 meeting was Stu Brandt of H. Brandt Jewelers in Natick Center. He said “as a business owner our expenses are… we’re getting killed.” Tariffs, utilities, insurance are all going “up, up, up, up, up,” and with a new landlord, Brandt finds himself in a triple net lease situation that involves paying base rent plus building insurance, maintenance costs, and property taxes. Brandt says he’s sort of looking to retire and sell his business, and that a split tax rate would put a big roadblock in the way of his plans. Brandt described small businesses like his as the “engine that drives the town” and said owners are living paycheck to paycheck as it is.
His sentiments were echoed by others.
Warren Cross, the owner of multiple service businesses and commercial properties in Natick, stated “You can say we’re very vested in this town.” He said he pays more than $300k in real estate taxes already, and said a shift to a split tax rate that would get passed on to tenants would harm them. A 10% cut on his residential property taxes wouldn’t even come close to offsetting a 40% increase in commercial property taxes, he said, referencing one possible scenario for a tax shift.
“I appreciate towns but they’re very inefficient usually when it comes to spending and cost overrides and everything, and believe me, I’m a businessman, I’ve been running my own company since I graduated from college 37 years ago… I understand business, I understand budgets, I understand lots of things to do with it… I just think this would be a very big mistake…,” said Cross, who added that he uses Natick’s single tax rate as a selling point to tenants vs. communities like Framingham that have a split tax rate.
Board Chair Kathryn Coughlin encouraged Cross to look at what the town has been doing to improve cost efficiencies, and emphasized that municipalities that go with a split tax rate, don’t necessarily go with a 10% residential decrease/40% commercial increase approach.
Filippo Sansossio shared his experience facing rising costs previously as a business owner and now as a commercial property owner. He owns a building on Cochituate Street in Natick, and said he made a decision ten years ago to rent three spaces under a triple net lease and has kept rents the same since. He’d like to go up on the rent, but the taxes keep escalating, and he doesn’t want to choke out his tenants. Sansossio said he got out of the body shop business years ago after getting pummeled by local taxes and insurance costs (“Unless you’re a crook, you ain’t going to make it.”).
“It’s been a good town to do business in. Please don’t ruin it,” he concluded, after Coughlin stressed that the town is still in the information gathering stage, and has made no decision to change the tax rate method.
Also chiming in was Irina Fiksler, a Natick resident who owns Skin Studio, which she relocated to Natick after running it in Boston for more than two decades. She said it would be sad to see small businesses leave Natick because of a shift to a split tax rate. Coughlin noted that for some portion of businesses whose owners live in town, like Fiksler, a discount on residential property taxes would actually be greater than a rise on commercial property taxes considering the commercial taxes can be written off.
Henry Kanner, owner of Natick Outdoor Store, stressed that small businesses are “getting squeezed everywhere,” from getting hit with various permit fees to the realities of competing vs. Amazon and the resulting smaller profit margins. Regarding a possible shift in the property tax division, he pleaded: “You just can’t keep squeezing people… eventually, it doesn’t pay to work…”
Paul Joseph, a former Select Board member, a current Natick business owner, and chair of the town’s Economic Development Committee, asked the board what sort of information it could use from the committee to help make its decision. The committee itself has the topic of a split tax rate on its Sept. 10 agenda.
Board member Cody Jacobs said he’s interested in looking at how other communities are handling tax rates in combination with recruiting businesses. Bruce Evans is curious about how a change to the tax rate would help or hinder attracting small businesses to Natick. Linda Wollschlager asked more broadly about what factors beyond tax rates entice businesses to come to Natick. Kristen Pope wanted to make sure communities being compared to Natick really are comparable.
Coughlin concluded the discussion by letting people know this wouldn’t be the last time this topic would be on a Select Board agenda.
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