Tuesday, April 24, 2018 16:21

An Equitable Tax Rate Split Or Not?,

Clinton has a terrible tax rate split right now, 1.65, the state max is 1.70. Other towns that have successfully attracted businesses, and I’ll group them all together – commercial, industrial retail, etc have done so through a more equitable tax rate split or even a single tax rate.

For those that don’t understand what the tax rate split is here is a quick definition: This option results in two rates: a rate for residential and open space property and a higher rate for commercial, industrial and personal property.

Clinton now charges businesses 1.65 times the residential rate. The decision to tax property classes at the same or different rates is made annually by the board of selectmen, or city council with the mayor’s approval, after a public hearing. (M.G.L. Ch. 40, § 56.)

Today Clinton has a rate of 1.65 for commercial/industrial property which unfairly penalizes them for just being a commercial or industrial piece of real estate. Please understand this isn’t just a large employer like Nypro, but your small mom and pop convenience store, coffee shop or retail store. These small businesses where the owners barely eek out a living bear the brunt of subsidizing our tax base.

When I was on the BOS we dropped the rate one year from 1.70 to 1.65 and the next year I believe it was dropped to 1.62 or 1.63.  This was when Scholastic Book decided to locate in Clinton citing the trend toward a more equitable tax rate. This in turn brought a taxable business along with employee’s to Clinton. Yes, if I remember correctly they did have a TIF with a ten year increment, but that wasn’t the impetus for them to locate here, it was the trend of a lower split they cited. They were not “hit” with a change in the split until after the change in the makeup of the BOS.  In December 2008 the BOS in an anti-business move raised the split to the state DOR’s maximum of 1.70.

The changes in the split from 1.70 down to 1.63 that were voted in during my tenure amounted to about a $12 to $15 per year increase for the average household. This translates to an average increase of $3.00 to $3.75 per quarterly bill yet decreases the prohibitively high taxes on small businesses which ultimately helps them stay in business.

I can’t wait to see what this years version of the BOS does to help our community. My bet is they opt to keep near the maximum split available which will keep businesses from locating or relocating here and keep squeezing the small mom and pop businesses for all they are worth. In other words they won’t be helping in creating jobs or getting businesses to locate or relocate here

For those who don’t know what a TIF is:  It’s A development tool designed to help finance certain eligible improvements to property in designated redevelopment areas (TIF districts) by utilizing the new, or incremental, tax revenues generated by the project after completion. Under TIF, property taxes within the TIF District are frozen for up to 23 years, the property owners then make Payments In Lieu of Taxes (PILOTS) to a “special allocation fund”. The proceeds of the fund are then used to reimburse the developer for eligible project costs or to retire indebtedness incurred to cover those costs.

A TIF is just another tool to help with economic development, yes they help but aren’t the be all, end all for economic development. A more balanced tax rate split is without a doubt one of the best ways to increase economic development. Another point is that both the community and economic development director and the chamber of commerce advocated for a more equitable split.

I wonder who will be working these issues now that Clinton has NO community and economic development director? A pro-active board would have already addressed this.

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One Response to “An Equitable Tax Rate Split Or Not?,”

  1. eugene nici says:

    as a small business in clinton, we have been streched to the limit with taxes, not only is it getting to the point that we cant afford to do business here, we cannot afford to employ people who desperatly need work now!! the antibusiness atmosphere here in clinton has caused not only the rapid decline of existing businesses but has also stopped many from locating here. as ms. dickhaut said at the last meeting quote,, she doesnt care about businesses in clinton, she only cares about the residents, yes so if you are one of the unfortunate people who has been laid of and cant find work, i highly doubt you will find it here in this town. why is it that are elected officials both fedral, state and local have no imagination, their answer to everything is taxes and more taxes

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