Nick Collins: Why I opposed Mayor Wu’s tax proposal

Earlier this year, when a study produced by the Center for State Policy Analysis at Tufts University suggested Boston reevaluate how it funds government services, city officials pushed back, initially dismissing concerns and defending exponential increases in spending . However, this defensive attitude quickly turned into panicked assertions of a dire economic scenario and prompted Mayor Michelle Wu to seek legislative approval for increase business taxes more than state law allows. Such an abrupt and dramatic about-face was remarkable to say the least.

The Wu administration then suggested that residents would see a 33 percent increase of their taxes and risk losing their housing if this new tax increase is not adopted by the Municipal Council and Parliament. For months, city officials escalated their rhetoric, while refusing to share official data that would actually show that Boston’s fiscal problems were not unmanageable. Even if the business tax increase was adopted, the city still planned to increase residential taxes by 9 percent in 2025just like in 2024. Residential relief was never on the table.

The City Council and House of Representatives passed the legislation without the city’s official assessment data, so I asked the Senate for a pause until the city releases the data. As soon as it was released, the data showed that the economic sky was not falling. They also showed that lawmakers did not have to accept the false choice of having to risk destroying Boston’s economy to mitigate a rise in residential property taxes.

Significant due diligence is necessary to make informed public policy decisions. Issues that impact residents and businesses should be debated based on objective data and facts, not guesswork, guesswork, or political agendas.

When this matter was submitted to the Senate at the end of its formal session this summer, I did my concerns are known. It was clear that downtown businesses were not the only entities to suffer disproportionately from the city’s proposed tax increase. Small businesses would have suffered just as much, if not more.

According to the Massachusetts Department of RevenueRaising business tax rates beyond the state’s current limit is “not good public policy.” This raises “constitutional questions” and constitutes “an obstacle to business attraction and retention.”

There are other tax relief options, such as increasing exemptions for homeowners, low-income residents and seniors. Working with Gov. Maura Healey, the Legislature did just that this session by passing the the largest tax relief program in a generation, alongside sweeping housing and economic development legislation. The tax relief package includes significant increases to the Child and Family Tax Credit, the Earned Income Tax Credit, and the Senior Circuit Breaker Tax Credit.

We did this collaboratively while increasing state employee salaries, upgrading Commonwealth bond ratings, and managing 2.7% growth in our budget while providing record levels of local aid in Boston. Boston, on the other hand, increased its budget by 8% year-over-year – for a total of $350 million – and 21 percent in the last three years.

What this 10-month process has shown is that City Hall needs to be more transparent and exercise fiscal restraint – not impose additional costs on residents and businesses. In order to provide residential tax relief, the mayor and city council should increase the maximum amount residential exemption of 35 percent to 40 percent.

The city could finance this amount by:

Tap into the surplus rainy day fund without affecting the city’s bond rating, according to the recent The Moody’s report;

Redirect funds generated through the Article 80 process of the Bluebikes program towards residential assistance;

Remove redundant external programs;

Execute other careful but targeted reductions such as the governor did this in the middle of fiscal year 2024 to balance the state budget.

Whether taxes will increase for Boston residents or by how much will be strictly up to the mayor and city council. Just like the state, the city can provide relief to taxpayers, stimulate economic growth and balance a budget. But this requires being data-driven and financially responsible.

There is still time to do it. For the sake of Boston’s taxpayers and the city’s financial health, I hope they take the time to get this right. Because it’s clear: the numbers don’t lie.

Nick Collins is a state senator from the First District of Suffolk in Boston.