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North Suburban News

Split Tax Rate Irks Reading Business Community

Oct 23, 2018 06:54AM ● By Dan Marra

In communities across Massachusetts, small businesses make up the fabric of the town center. It’s no different in Reading with local shops driving foot traffic to the downtown area.

But those same small businesses expressed concern recently as the Reading Select Board recently decided to split the commercial and residential tax rate, increasing the commercial tax rate to $14.46 per thousand. It was $14.03. Select member Barry Berman voted to support the increase, citing the need to make the tax rate more equitable.

"Since 2012 average residential property has increased 34 percent," Berman said. "Conversely, the valuation of the average commercial property has increased only 5 percent. "Therefore, the residents are paying a disproportionate share."

In comparable communities, only Winchester had a lower commercial tax rate in 2018 than Reading – at $11.50 per thousand. North Reading ($16.34), Lynnfield ($17.08), Melrose ($19.36), Stoneham ($22.35) and Wakefield ($25.61) all had a higher commercial tax rate than Reading last year.

Additionally, Berman cited the differential between residential and commercial tax rates in neighboring communities, highlighting that only North Reading does not have a split tax rate. Lynnfield residents paid $3.32 per thousand less than the commercial tax rate, as did Wakefield ($12.66), Stoneham ($10.64) and Melrose ($8.30).

However, Kevin Barile, board member of the Reading-North Reading Chamber of Commerce and owner of Doherty Barile Family Funeral Home, disagrees with those comparisons.

“It’s not fair to compare us to neighboring towns like Lynnfield that have a Market Street or a Wakefield,” Barile said. “There are only 8 percent of businesses in Reading. Compare that to 15 percent in Wakefield. The fewer businesses you have, the greater impact this will have. Those towns have rates that work best for them."

Additionally, Barile cited the poor summer, the increasing minimum wage, the mandatory paid time off and the need to keep up with shopping centers in Burlington and Lynnfield as some of the reasons why he, along with many of the small business owners in town did not agree with this increase.

“Residents will save maybe $50, while property owners will see their bill increase by $1,500-$2,500 and they’ll just pass it off to the business owners who are renting the property,” Barile said. “I haven’t seen a resident that was in favor of this change. It’s upsetting that the Board picked this higher rate.”

But according to Berman, he does not foresee the business owners handling the brunt of that increase. With many buildings housing multiple store fronts, Berman said that a potential $2,000 increase would be split among all the business owners renting space in a commercial property.

“We have tremendous businesses in this community, and this decision was about equity and fairness,” Berman said. “At the end of the day, we moved the needle 25 cents, and we’re still the lowest tax rate around. Businesses don’t locate because of the taxes, they go where the market and customers are and Reading has supported their local business community and the town has folks with a disposable income.”

 If the Board wanted to split the commercial tax rate, Barile would have liked for the town to wait until next year when Reading is expecting an increase in businesses through the multiple construction projects taking place in the downtown area.

“They should have held off this year, let the new businesses come in and then do the shift,” Barile said. “This may sound like a small shift for some but it could have a huge impact for others.”

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