LAWRENCE — The property tax burden will shift slightly from businesses to homeowners beginning in July, costing the average homeowner up to $13 but saving the average business as much as $197.
Under the new formula, homeowners will pay 61 percent of the property taxes the city will collect in the fiscal year that begins July 1, compared to the 59 percent share it paid this fiscal year. In all, the city will collect $57.4 million in property taxes in the new year, up 2.5 percent. Almost everyone will see some property tax increase regardless of the new formula nudging more of the burden toward homeowners.
City Councilor Daniel Rivera, who becomes mayor on Jan. 2, proposed shifting some of the tax burden to residential properties as a way to attract businesses and jobs, which was a centerpiece of his campaign this fall. The council on Tuesday approved it in a 6-2 vote, giving Rivera a first victory on the council as he prepares to take office Jan. 2.
“It’s sending a message that we care about having you in our city,” Rivera said about businesses, then warned that the taxes on one local business — New Balance — have gone up enough in recent years that “no one should be shocked if they said, ‘Taxes are too much. We have to leave.’ No one wants that to happen.”
New Balance is the seventh biggest property taxpayer in Lawrence. The assessed value of its retail outlet and factory on South Union Street is $13.4 million, which will bring it a tax bill of $451,815 next year. Without the new tax formula, New Balance would have paid another $2,682.
For the average commercial property, which is much smaller than New Balance, the savings will amount to $62. The owner of the average industrial property will save $197.
Homeowners will absorb the tax break for New Balance and the city’s other commercial and industrial properties, but the the impact on them will be smaller because the burden will be spread widely.