Mayor James J. Fiorentini > Press Release

November 20, 2008
FOR IMMEDIATE RELEASE:

Mayor Vetoes Tax Increase on Residents Fiorentini Vetoes Tax Reclassification to 145, Urges Councilors to Set Tax Rate that Protects Residential Taxpayers

HAVERHILL- Mayor James J. Fiorentini today used his veto pen to reject the tax classification plan adopted Tuesday night by the City Council. This plan would have set the commercial tax rate at 145 instead of 150, adding over $600,000 of tax burden onto residential taxpayers.

The Mayor explained his actions while vetoing the bill before a group of seniors at the Council on Aging Thanksgiving holiday feast at the Citizens Center.

In his veto message to the City Council the Mayor stated:

“The tax classification system set by the council increases residential taxes at a time when our residents can least afford to pay. The plan passed by the council, while well intended, is regressive, helps both those who need help and those who do not, at the expense of the residential taxpayers who are most in need of assistance. While the attempt was to help the smallest Mom and Pop stores in the city, the shift from 150 to 145 and actually hurts, rather than helps, some of the smallest businesses.

“The tax rate set by the Council shifted over $600,000 from businesses onto the hard pressed residential taxpayers of this city.

These are very difficult times.

These are the time when over 6% of our citizens are unemployed, and the other 94% worry every minute that they will be unemployed in the future.

These are the times when 200 families in Haverhill are so in such bad straits, that they can not pay their water bills, and run the danger of having their water shut off.

These are the times when well over 100 of our citizens have had their homes foreclosed, and many more are in danger of losing theirs.

These are the times when thousands of our citizens have seen their 401K’s and savings wiped out.

These are not the times to shift more taxes onto our residents.”

The Mayor added in his veto message:

“Several councilors expressed understandable concern for small businesses here in the city. I share that concern.

We have worked hard over the past five years to streamline permitting in order to help small business. We have exempted over 700 of the smallest Mom and Pop businesses from paying any personal property tax at all. We eliminated the need for those with a common victualer’s license to come to City Hall. We put all of our permit applications on line, and we worked hard to make all of our offices more business friendly. I agree more needs to be done.

Unfortunately, the step taken by the council, while well intended, gives a break to all businesses, large or small, whether they need it or not. The net effect is an extremely regressive tax shift, where over $600,000 in the total city tax burden is shifted from businesses onto residents.”

The Mayor noted that of that $600,000 shift, over 25% of it went to the ten largest corporate taxpayers in the city, which include some of the big electric and gas utilities. Under the action taken by the Council, Mass Electric will pay $83,439 less, Maritimes and Northeast gas pipeline would pay more than $18,000 less and the DeMoulas/Market Basket realty group would see a five digit decrease as well.

In all, the ten largest corporate taxpayers receive a $165,000 tax break under the proposal passed by the council. The ten largest corporate taxpayers receive an average tax break of over $16,000 under the proposal passed on Tuesday night.

“By contrast, the ten smallest businesses taxpayers, the true ‘Mom and Pop stores’ that the Council correctly wanted to assist, get a grand total of $234, from the tax shift,” noted the Mayor.

The average tax break for the ten smallest businesses is $23.40.

“If they live in the city, those ten Mom and Pop businesses will get a tax increase under the proposal passed by the council, since the $23 decrease in their commercial taxes will be more than offset by the $35 increase in their residential taxes,” added the Mayor.

The Council action will hurt these smallest businesses in another way. To the extent that our residents have less money to spend, they have less to spend in the smallest businesses around the city.”

The Mayor noted that last year, the tax rate paid by businesses dropped from 160 to 150, further enhancing the business competitiveness of the City. Haverhill’s tax rate on businesses is already LOWER than that of neighboring Lawrence, Lowell and Methuen, and also lower than Lynn, Malden and Medford and other similar size cities in the northeast region of Massachusetts.