Printer Friendly

Doubly absurd; City council should vote single tax rate.

COLUMN: In our opinion

When it comes to municipal tax rates, the Worcester City Council has staged a long-running theater of the absurd that would make any modernist playwright proud. The latest double-talk of a task force to study the merits of a single tax rate has been echoing around City Hall since the fall of 2007, yet no such task force has been formed. In reality, no such task force is really necessary, because the folly of the city's tax structure has long been evident.

Since 1984, Worcester has placed itself at a competitive disadvantage by maintaining a dual tax rate that discourages businesses from locating or expanding in the city, thereby weakening the city's commercial and industrial tax base. Proponents of a dual rate contend it should help residents, since business is picking up a larger share of the tax burden.

But what works on paper doesn't always work in the real world. Offering residents the "lowest possible tax rate" has only meant less overall business growth, fewer jobs and less tax revenue for the city. Meanwhile, suburban communities around Worcester have enjoyed considerable success luring business their way, in part due to single tax rates.

The basic economic reasoning at work here is illustrated in a recent report by The Research Bureau on Worcester's fiscal year 2010 budget. That report includes a recommendation that the city return to a single tax rate. It's easy to see why:

Worcester currently taxes businesses at $28.72 per $1,000 valuation, more than twice the residential rate of $13.50 per $1,000 valuation. That residential rate is slightly higher than the average residential rate of $13.21 per $1,000 valuation for 16 communities located in a triangle of communities formed by Worcester on the west and the I-495 corridor from Marlboro to Milford on the east.

The study area is one rich in high-technology, information technology and manufacturing firms, offering tens of thousands of high-paying jobs that generate a wealth of tax revenues. While Worcester certainly shares in that prosperity, the city's location, work force, cultural attractions, transportation infrastructure and educational and medical powerhouses offer a powerful argument that a much higher level of economic growth should be possible within the city's limits.

Tax rates are only one factor in an economy, but a powerful one, and reverting to a single rate would serve as a strong incentive for companies to locate or expand in Worcester. It is also a step that lies within the council's power to take.

Yet the council refuses to act, choosing instead to curry short-term political favor with voters by offering them a rate that confers no particular monetary advantage while, in the long term, they pay the price of slower growth.

Talk of a task force is doubly absurd in that a majority of councilors are already on the record in favor of the status quo, and hardly need a task force to tell them what they should already know.

What Worcester needs is less posturing and more leadership, including people willing to act in the best economic interests of its residents and businesses.
COPYRIGHT 2009 Worcester Telegram & Gazette
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2009 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:EDITORIAL
Publication:Telegram & Gazette (Worcester, MA)
Article Type:Editorial
Date:May 29, 2009
Words:522
Previous Article:Time to get down to business.
Next Article:US funds give youths a shot at `real' paycheck.
Topics:


Related Articles
EDITORIAL WEEK IN REVIEW.
EDITORIAL WEEK IN REVIEW.
Gasoline tax increase will backfire.
EDITORIAL WEEK IN REVIEW.
3 city councilors pledge to vote for lowest tax rate; Promise means likely approval.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters