Government watchdogs are raising concerns about the impact the coronavirus shutdown could have on property taxes, with one sounding a call to re-open businesses as soon as possible, an approach medical experts say could undercut efforts to stop the virus spread.
“I am very concerned about businesses not paying their rent, and therefore a drop in commercial property taxes,” Massachusetts Fiscal Alliance spokesman Paul Craney said. “Many cities and towns that rely heavily for commercial property taxes will feel the shortfall very soon.”
Craney estimates municipalities will notice the revenue drop as soon as April 1 and claims there will be another “wave of this depression” by May 1 if mortgage payments are not paid and there is a reduction in the residential property taxes.
“That’s why it is so important that business be allowed to open back up on April 7 and relief is given to employers and taxpayers,” Craney said. “The best thing state leaders can do is to allow businesses to be open, and temporarily suspend the e-commerce sales tax and meals tax. Businesses need to be able to do commerce and people need to be able to get their food products they want.”
Todd Ellerin, director of infectious diseases at South Shore Health, countered that the uncertainty around the disease makes it difficult to estimate from now where the state will be on April 7 with the coronavirus.
“We have to see what’s happening at that point and make adjustments based on that,” Ellerin told the Herald. “I cannot forecast the pace of this right now. If you had to make me guess, I would say that it would be too early on based on what I’m seeing.”
Ellerin stressed the significance of making these types of decisions with the consensus of public health officials, however he said social distancing is the safest approach the state can take right now considering the community spread that’s occurring and the trajectory that continues to increase.
“This trade off is a no-win situation. In the short term it’s a no-win situation because you’re balancing trying to save lives with trying to save livelihoods,” Ellerin said. “Once we see that we have this under control, then I believe we should start to open up businesses and remember to still protect most vulnerable people. I do think a hybrid approach ultimately is going to be the best way to go.”
David Tuerck of the Beacon Hill Institute said local governments should start planning now for the falloff in property tax revenue that will “inevitably materialize” as a result of the shutdown in Massachusetts.
“That should include plans to cut staff at shuttered schools and at other public facilities that are supported by local tax revenues,” Tuerck said. “What local governments should not do is attempt to shift the tax burden to already-beleaguered home owners. It is not realistic to keep paying the salaries of government employees who have been sent home out of concern about the virus, while finding some other way to maintain revenue collections.”
Gov. Charlie Baker’s office and the Department of Public Health did not return requests for comment.
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Watchdogs warn of coronavirus pandemic impact on property tax - Boston Herald
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