Boston Mayor Michelle Wu's push to temporarily rebalance property tax rates appears to be on life support on Beacon Hill amid an emerging spat with the top Senate Democrat.
After the Senate wrapped up formal business for the term with the House-approved home rule petition still untouched, Senate President Karen Spilka's office said Tuesday the bill could do "serious damage to Boston's economy" and that she does not yet have a critical mass of support in her chamber.
Wu said earlier in the day she is "holding out every hope" lawmakers will find a path forward to advance the bill (H 4942), which has drawn criticism from influential business and real estate groups. She did not hesitate during a radio interview to place the onus on the Senate.
"If this does not happen, every single resident in the city of Boston will know that their taxes are going up because the Senate did not vote through that last step," Wu said on GBH News's "Boston Public Radio."
Asked if the Senate would take up the property tax proposal or another Boston home rule petition reforming the city's planning department, a Spilka spokesperson fired back at Wu.
"Blaming the Senate may be politically convenient for the Mayor, but it does nothing to improve a policy proposal that has been widely questioned by fiscal watchdog agencies and could do serious damage to Boston's economy," the Spilka spokesperson said. "The Senate President has received no indication that there is sufficient support among Senators for this policy proposal to move forward."
The pointed response from Spilka's office is the latest evidence of disagreement between House and Senate Democrats, who wield supermajority margins in both chambers but struggled to find common ground before last week's end of formal business.
The House — whose budget chief, Rep. Aaron Michlewitz, is a Boston resident and Wu ally — approved the property-tax home rule petition 132-24 on the penultimate day for formal business. At the same time, the mayor agreed to scale back its scope via executive order if and when it becomes law.
The measure soon became ammunition in an open feud between Spilka and House Speaker Ron Mariano. When reporters asked Spilka last week about the outlook for the proposal, which was first filed on Beacon Hill on June 18, she said senators "haven't debated, discussed or even seen the bill, the new complex bill."
Spilka then took out a sheet of paper and read words nearly identical to those Mariano used a day earlier to criticize an unrelated Senate proposal.
"And as you know, any time you release a bill the day before session ends, it's a very difficult expectation for us to hear it, especially when it has new proposals, major proposals that haven't had the opportunity to be debated or voted on," she said. "It sort of tells you that they're not really serious about passing the bill to begin with."
By declining to take up the bill before formal sessions ended, Spilka and Senate Ways and Means Committee Chair Michael Rodrigues increased the difficulty they will need to overcome should they eventually decide to pursue a vote.
A single lawmaker's objection during an informal session can stall a bill, and while legislators often hesitate to pull the trigger on preventing something -- especially a local bill -- from becoming law, the proposal has influential, well-financed opponents including the Greater Boston Real Estate Board that are likely to keep up the pressure.
"Increasing Boston's commercial property tax rate could not come at a worse time," GBREB CEO Greg Vasil said last week following the House vote. "Though we appreciate the House's efforts to lessen the impact on the small business community, the fact remains that commercial vacancy rates are startlingly high and commercial property values are distressingly low. The compromise reached may protect residential property owners from a serious tax spike this year, however it does not protect residential property owners, single and multifamily, from massive increases in subsequent years two and three. Those increases will, in turn, lead to higher residential rent prices, which leaders must avoid in this time of housing crisis."
In a report published last week, real estate services firm Colliers said Boston's office market experienced "its best quarter in two years" during the second quarter of 2024, but warned it's "still firmly a tenants' market."
Nearly a quarter of commercial inventory is vacant, the report found.
Wu and her deputies want the state to grant them the power to temporarily shift a higher share of property taxes onto commercial owners instead of residential owners if declining commercial values trigger a sudden revenue shortfall.
Without action, Wu said, residents across the city will "most likely see a very significant tax increase, and therefore a jump in their housing costs" once the dominoes begin to fall.
"There's a little bit of misinformation about how we're shifting it, and therefore having a spike on businesses. That is not true," Wu said. "Business taxes will still go down while residential taxes are moderated. The businesses just won't be getting the massive tax break that I think some of them are, some special interests are hoping for."
The property tax measure is one of several Wu priorities that stalled on Beacon Hill. The House also approved a home rule petition (H 4947) to reshape the Boston Planning and Development Agency, which similarly did not emerge in the Senate, and both branches embraced but failed to reconcile legislation awarding hundreds of additional liquor licenses to the city.
"I am still very disappointed that we are in this place, but I recognize that there were many, many important issues, some of which had pretty clear consensus, that did not have the opportunity to move forward, some of them much more widely applicable statewide to everyone, such as the economic development bill," Wu said.
Legislative leaders have signaled they are open to calling lawmakers back to finish an economic development bond bill during a special formal session, which under House and Senate rules are not supposed to resume until the next term.
With details about a return to formal business still scarce, Wu said she hopes that some of the city's home rule petitions "can also be included in that."
"We will do whatever it takes to make ourselves available at the city level, to share information, to advocate, to work with the Senate in particular, because several of our items were voted through overwhelmingly on the House side and then didn't make it through that final [Senate] step later," she said. "My sense is that we were in line following a number of high-priority things, and they did not make it down the list all the way."
The handful of Boston bills each have a different outlook.
Legislative negotiators have said they are optimistic they can iron out final details about a compromise bill giving the city more liquor licenses, many of which would be targeted for communities of color.
It's less clear if Senate Democrats agree with their counterparts in the House about the need to grant the city's request for BPDA reforms.
