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In 1984, the Commonwealth approved legislation allowing cities and towns to adopt different property tax rates for different classes of property: commercial/industrial/personal (CIP), residential, and open space. Worcester was one of the first communities to adopt this “local option.” Its effect over more than three decades, according to The Research Bureau’s latest report, has been that “business owners have subsidized Worcester’s residential taxpayers to the tune of more that $650 million.” Is this arrangement beneficial for Worcester?
Worcester is steadily losing businesses. Between 1992 and 2016, Worcester’s CIP base shrank from 3,959 parcels to 3,421, or 16%, while the number of residential parcels increased from 34,789 to 39,985, or 15%. The shrinking CIP base means that residential property must bear more of the overall tax burden. This result is contrary to the original purpose of tax classification which was to keep the residential burden low.
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