Mayor Wu’s line in the sand on property taxes doesn’t make political or economic sense – The Boston Globe

Apparently not, even with a late-November deadline for legislative approval of her home rule petition fast approaching.

To the bafflement of many on Beacon Hill and in the business community, Wu on Wednesday made clear once again she wasn’t interested in modifying the bill she filed with the Legislature in April to help the city offset the decline in commercial real estate values.

The legislation has stalled amid opposition by business groups and skeptical state senators who think City Hall should share the financial pain of property owners by also reducing spending or tapping reserves to balance its budget.

The news: Such moves “would be very financially irresponsible,” Wu told reporters in a virtual briefing from Moon Island, where she was attending a Boston firefighters event. It’s a message she recently delivered behind closed doors to lawmakers and business leaders.

The mayor also dismissed the idea of using city funds to help homeowners who can least afford to pay higher property taxes, saying it would violate state laws and perhaps the state constitution.

• Wu said City Hall would need to cut its $4.64 billion budget by $265 million, or nearly 6 percent, to have the same impact as her property tax plan. That would force a layoff of 2,200 city employees and cuts to essential services.

The reaction: Business leaders said they’re not asking the city to come up with the entire $265 million. Instead, they are pushing for a package of changes that would soften the blow on commercial landlords and still provide relief for homeowners.

• “We need to piece a solution together,” said James Rooney, chief executive of the Greater Boston Chamber of Commerce. “This was not an unexpected storm,” he said, noting that the city’s budget increased 20 percent over the past three years even as signs emerged that commercial real estate was in trouble.

Marty Walz, interim president of the Boston Municipal Research Bureau, a business-backed watchdog group, said that after boosting spending by 8 percent in the current fiscal year, a trim of 1 or 2 percent was easily manageable without crippling the city.

• “What manager can’t find that in their budget?” she said.

Recap: High vacancy rates have eroded the value of office buildings and other business properties. Recent data from real estate firm JLL show a slight improvement, but the decline threatens to throw Boston’s operating budget out of whack. Commercial real estate taxes, which are pegged to assessed values, account for about 40 percent of its revenue.

New numbers: At her briefing, Wu said the city’s latest data show that commercial assessments will drop an average of 7 percent, effective in January. The average residential assessment will increase 4 percent.

• Based on those numbers — which are subject to a final revision — residential tax bills would increase an average of 14 percent compared with the fiscal year ended in July without approval of Wu’s plan, and 5 percent if she gets the green light from lawmakers.
• The impact on commercial properties would vary, but Wu said a typical building valued at $5 million would see its tax bill fall 6.7 percent under the new assessments, or 0.5 percent if her plan is in place. (Newer “Class A” properties, which are doing better in attracting and retaining tenants, would likely see an increase in tax bills, the city said previously.)

Final thought: For the average Boston home, which the city said is assessed at $838,000, the tax increase in the third and fourth quarters of 2025 compared with the first two quarters would be a total of $770 if Wu’s bill doesn’t pass, and $275 if it does.

As a possible compromise, the city could kick in enough money to split the difference between those two outcomes, leaving an increase of less than $250 on the average residential tax bill between January and June.

Why is the mayor taking on Spilka — whose approval she also needs to complete the city’s takeover of the Boston Planning and Development Agency — over a change the city could afford?

• “If you think that the only way forward is to be as uncompromising as possible,” Obama said, “you will feel good about yourself, you will enjoy a certain moral purity, but you’re not going to get what you want.”

Wise words for any politician.

Larry Edelman can be reached at larry.edelman@globe.com.