Some commercial property owners in New Bedford are receiving six-figure payouts from settlements with the city's tax assessor's office after appealing their assessments to lower their bills.
That's according to Grace Ferguson of the New Bedford Light.
CAI's Gilda Geist spoke with Ferguson to find out more about this process, and just how many taxpayer dollars go toward these settlements.
Gilda Geist You reported that the city of New Bedford has given out nearly $1 million in tax abatements to commercial property owners. How did you come across this information?
Grace Ferguson I've actually been working on this story for pretty much a year. I first got curious about tax abatements in general, and after seeing the tax abatements that the city had given out, I noticed that there were some recurring ones year after year.
GG How widespread is this? Is it that there's a lot of commercial property owners collecting money this way, or is it rather that the sum is large?
GF The city's assessing staff and other experts that I talked to say that $1 million over the course of four years actually isn't very much for a city like New Bedford.
GG So if $1 million isn't really that much, what is the significance of this, or what is the impact?
GF What I found really interesting about this is that the process for commercial property taxes is just completely different from the process for property taxes for a home.
Experts say that oftentimes valuing commercial property can be more art than science. What that means is that there's a little room for negotiation. There's also room for negotiation in the property taxes when the assessors don't have all the data they need. And that's another thing I found in the course of reporting this story, is that oftentimes, commercial property owners don't tell the assessor what their income and expenses are, even though they're legally required to submit a form showing that each year.
Assessors work in an information deficit a lot of the time, and so when they're in the dark, the assessments are a little less accurate. And that means that it's more likely that a commercial property owner is going to get a tax bill with an inaccurate assessment, and then they're going to appeal it.
GG If the city, as you say, has settled every single appeal in the last few years and hasn't been going to trial, what does that tell us?
GF I think it tells you a lot about the way this process works. The vast majority of these appeals do not go to trial, and that's just something that's true in litigation in general. It's expensive to go to trial. That's a cost for the person appealing, and that's also a cost for the city that taxpayers are going to have to pay.
One assessor I spoke to said that normally when assessors think that they really have a case, and they've got a reason why their assessment should be valid, they do go to trial. The fact that New Bedford has not taken the cases to trial suggests that there may have been inaccuracies that affected the assessments.
GG What would you say is the public information value of looking at some of these bureaucratic, less exciting but still important processes in our cities and towns?
GF [Laughs] I know, I got a lot of raised eyebrows as I was reporting this story. Tax experts were like, “you're looking into what?”
The value of it is that at the end of the day, this is public money that gets spent—either on a refund, or negotiating a refund or settlement, or if it goes to trial, taking it to trial. It's all public money and public resources that the city is spending to do this, and so that's why I think it's worth looking at how it works.