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Newton officials ease burden for commercial taxpayers over COVID-19

Newton City Hall
Newton City HallSuzanne Kreiter/Globe staff

Newton’s City Council on Monday approved new tax rates for Fiscal 2021 aimed at helping to ease some of the burden on commercial property owners -- and by extension, local businesses -- who are weathering the financial hardship imposed by the COVID-19 pandemic.

Newton typically approves separate tax rates for residential and commercial properties. In doing so, the City Council shifts some of the city’s tax levy away from residential and onto the city’s commercial base, which also impacts local businesses.

This year, officials approved a lower shift from residential to commercial properties that was requested by Mayor Ruthanne Fuller. They hope it will provide some relief from the economic issues caused by the health crisis, Council President Susan Albright said in an interview.

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Many local businesses pay a portion of commercial taxes and other expenses, Albright said.

“We decided this was the year to give the commercial [base] a break,” Albright said. “We tried to make a balance.”

The lower percentage means the owner of a commercial property that is assessed at the city’s median value will see a $366 reduction in their tax bill for Fiscal 2021, according to city data.

The owner of a residential property assessed at that median value will see a $42 increase in their tax bill with the lower shift to commercial properties, according to the city.

Overall, however, the tax rate will increase for both commercial and residential property owners.

In a 22-0 vote, councilors approved Fiscal 2021 tax rates of $10.76 per $1,000 of assessed value for residential property owners. That’s up from from a rate of $10.44 for Fiscal 2020.

Under the new rate, the tax bill for single family home assessed at the median value of $1,055,600 in Newton will total $11,358, an increase of $461.94, according to the city.

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For commercial properties, the new tax rate will be $20.12 per $1,000 of assessed value, up from $19.92.

A commercial property assessed at the median value of $1,016,850 would have a tax bill of $20,458, an increase of $595.31 from Fiscal 2020.

Officials point out those new tax rates reflect the change in the city’s long-standing practice over how much it asks commercial taxpayers to bear.

State law allows the tax levy to be shifted from residential property to commercial, industrial, and personal property.

In Newton, officials are able to shift that levy away from residential and increase the levy on those other properties by as much as 175 percent each year.

Residential property values make up nearly 90 percent of assessed taxable properties in Newton, while commercial properties accounts for about 10 percent, according to Fuller.

But many businesses are struggling to make ends meet due to the pandemic, Fuller said. She asked the City Council to consider shifting a smaller percentage of the tax burden onto commercial property owners.

So for Fiscal 2021, which began July 1, officials instead approved a smaller 172 percent shift to commercial property owners, rather than the maximum amount allowed by state law.

“This is an effort on the part of Mayor Fuller and [the] City Council to send a message of support for Newton’s small businesses,” said Maureen Lemieux, the city’s chief financial officer, in a statement.

During Monday’s City Council debate, Leonard Gentile, a Ward 4 councilor-at-large, said he wanted to show his support for local businesses during the pandemic.

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“I always felt — and I have a piece of commercial property — that commercial landowners have ways of making up tax bills, but not this year,” Gentile said. “This is an opportunity to show people that we’re hearing them.”

Richard Lipof, vice president of the City Council, said the move was the right thing to do.

“It’s a message that we care and there will be a savings to the property owner, and if the tenant is paying their share of taxes, then a savings to the tenant,” Lipof said in an e-mail.



Greg Reibman, president of the Newton-Needham Regional Chamber, said in a statement that councilors decided “to give business a break.”

“The chamber is grateful to the council and mayor for their consideration of the challenges facing our commercial tenants,” Reibman said.


John Hilliard can be reached at john.hilliard@globe.com.