A City Council committee has made a tentative decision to tax the 9 percent of the city's nearly $6 billion in property used for business and industry at a slightly higher rate than the vast majority of residential properties.
Tomorrow, the full council considers the issue of tax classification - whether to tax commercial property at a higher rate than residential, and if so, by how much.
The Budget and Finance Committee quickly endorsed on Thursday the split used by the last council - a 6 percent increase in the commercial rate - to give households a slight reduction.
The 1.06 classification factor selected by the committee, the same as last year, means residential property would be taxed at $8.62 per 1,000 of valuation while commercial property would be taxed at a rate of $9.18.
Without classification, all property would be taxed at the $8.66 rate.
For residential property valued at $250,000, the proposed shift being considered would mean a savings of $12.50, but because the commercial sector is so small, the compensating increase in the taxes of a $250,000 commercial property would be $132.
For residential and commercial properties valued at $500,000, the savings for the homeowner would be $25 while the added taxes to the commercial property owner would be $265.
Tomorrow, the full council considers the issue of tax classification - whether to tax commercial property at a higher rate than residential, and if so, by how much.
The Budget and Finance Committee quickly endorsed on Thursday the split used by the last council - a 6 percent increase in the commercial rate - to give households a slight reduction.
The 1.06 classification factor selected by the committee, the same as last year, means residential property would be taxed at $8.62 per 1,000 of valuation while commercial property would be taxed at a rate of $9.18.
Without classification, all property would be taxed at the $8.66 rate.
For residential property valued at $250,000, the proposed shift being considered would mean a savings of $12.50, but because the commercial sector is so small, the compensating increase in the taxes of a $250,000 commercial property would be $132.
For residential and commercial properties valued at $500,000, the savings for the homeowner would be $25 while the added taxes to the commercial property owner would be $265.
A $750,000 home would save $37.50 while the owner of a commercial property of that value would pay $397.50 more.
Chamber of Commerce Director Michael Costello argued that the slight savings a shift in classification would give homeowners was not worth the sizable additional burden it would place on commercial property owners.
"Because of the preponderance of residential properties," he told the committee, "you can do very little to provide relief to residential property owners."
Since 1998, successive City Councils have reduced the degree of split. The 1998 council increased the commercial rate by 37 percent, which was expressed as a classification factor of 1.37.
It was dropped to 1.35 in 1999 and to 1.30 in 2000, where it stayed until 2003 when it was dropped again to 1.25, and then to 1.12 until last year it was set at 1.06.
Costello urged the council to continue the trend until a single rate applied to all properties.
Six new councilors will vote on classification for the first time.
Steven Magoon, Mayor John Bell's administrative assistant, told the committee the mayor advocates keeping the split where it was last year.
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