City councilors want a hearing on commercial tax revenue

Two Boston city councilors on Wednesday called for further examination into the city’s property tax base and the future of downtown. Brian Worrell, the District 4 councilor who also serves as chair of the Ways and Means Committee, asked the council on Wednesday to schedule a hearing on the future of commercial property tax revenues ahead of the city’s fiscal 2025 budget presentation next month. Property taxes generate nearly three-quarters of the city’s $4.3 billion budget. Also on Wednesday, Councilor Ed Flynn of District 2 proposed creating a blue ribbon commission of business leaders, city and state officials, advocates, and other stakeholders to examine strategies of how to fill empty downtown offices. The office vacancy rate downtown is currently 18.1 percent, the highest in decades, according to CBRE research. In an interview, Worrell said he’s heard from commercial property owners in the city that their properties are worth less than when they first bought them — and that has him concerned. If that leads to declines in Boston’s property tax base, it could impact the city’s “ability to pay for services and to be able to serve the constituents of Boston,” Worrell said. Taxes from commercial and residential property were expected to generate $3.2 billion this year; of that, some $2.1 billion was expected to come from commercial buildings, including offices and retail, Worrell’s hearing order states. One recent study estimated that if Boston office values drop by 20 percent to 30 percent, tax revenue could fall $1.5 billion below prior projections over the next five years. Some 1,715 property tax owners have disputed their city assessment and applied to lower their tax bills this year — a process called abatement. While the city has received about 100 fewer applications overall this year than last, such requests increased by 27 percent in the downtown core — home to many of the city’s most valuable buildings. — CATHERINE CARLOCK