Why I opposed Mayor Wu’s tax proposal – The Boston Globe

Earlier this year, when a study produced by Tufts University’s Center for State Policy Analysis suggested Boston reevaluate how it finances government services, city officials pushed back, initially dismissing concerns and defending exponential spending increases. That defensiveness, though, quickly shifted to panicked claims of a dire economic scenario and prompted Mayor Michelle Wu to seek legislative approval to raise taxes on businesses more than state law allows. Such an abrupt and dramatic about-face was notable, to say the least.

The Wu administration then went on to suggest that residents would see a 33 percent increase in their taxes and risk losing their homes if this new tax increase did not pass the City Council and the Legislature. For months, city officials escalated their rhetoric, while refusing to share official data that would, in fact, show that Boston’s fiscal issues were not unmanageable. Even if the business tax hike passed, the city still planned to raise residential taxes by 9 percent in 2025, just as it did in 2024. Residential relief was never on the table.

The City Council and the House of Representatives passed the legislation without the city’s official valuation data, so I called for a pause in the Senate until the city disclosed the data. Upon their release, 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 cratering the Boston economy to mitigate a spike in residential property taxes.

Ample due diligence is required to make informed public policy decisions. Matters that impact residents and businesses must be debated based on objective data and facts — not guesswork, conjecture, or political agendas.

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

According to the Massachusetts Department of Revenue, raising commercial tax rates beyond the current state limit is “not good public policy.” Doing so raises “constitutional issues” and poses “an impediment to attracting and retaining business.”

There are other tax relief options, such as increasing exemptions for homeowners, low-income residents, and seniors. Working together with Governor Maura Healey, the Legislature did exactly that this session by passing the largest tax relief package in a generation along with 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 Senior Circuit Breaker Tax Credit.

We did this collaboratively while also increasing wages for state employees, improving the Commonwealth’s bond rating, and managing a 2.7 percent growth in our budget while providing record levels of local aid to Boston. Boston, on the other hand, grew its budget 8 percent year over year — a total of $350 million — and 21 percent over the past three years.

What this 10-month process has shown is that City Hall must be more transparent and demonstrate fiscal restraint — not pile more costs onto residents and businesses. To provide residential tax relief, the mayor and City Council should increase the maximum residential exemption from 35 percent to 40 percent.

The city could pay for this by:

▪ Drawing from the surplus rainy day fund without impacting the city’s bond rating, per the recent Moody’s report;

▪ Redirecting funds generated via the Article 80 process from the Bluebikes program to residential relief;

▪ Cutting redundant external programs;

▪ Executing other prudent but targeted cuts like the governor did in mid-fiscal 2024 to balance the state budget.

Whether taxes go up on Boston residents or by how much is strictly up to the mayor and the City Council. Like the state, the city can provide relief for taxpayers, stimulate economic growth, and balance a budget. But it requires being data driven and fiscally responsible.

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

Nick Collins is state senator for the First Suffolk District in Boston.