Dear editor,

I am writing to shed light on an issue that affects not only the commercial sector but also has a profound impact on the residents of our community: The City of Peabody enjoys one of the lowest residential property tax rates in the Commonwealth, which is subsidized by a higher tax rate on commercial properties. As representatives of the Peabody Area Chamber of Commerce, we feel compelled to highlight the interconnectedness of this decision and its implications for our residents.

While the debate surrounding tax rates often centers on their impact on residents, it’s crucial to recognize the ripple effect that such changes can have in a community as a whole. Imposing higher taxes on commercial properties inevitably trickles down to affect residents in several significant ways.

Oftentimes, when we think of “business” we think of large, successful outfits with handsomely paid CEOs or falsely assume anyone who owns a building (or their own business) is somehow more prosperous than the rest of us. While in some cases this might prove to be true, in many more situations it is the small business owner that bears the burden. Many commercial properties are not owned by the business that is operated within or commercial tenants have what is called a triple net lease, meaning that any expense incurred by the property owner (taxes, water, maintenance) is passed on directly to the tenant — in addition to their monthly rent expense.

So the local coffee shop, pizza joint, boutique, or service provider now facing higher tax burdens may need to adjust their pricing strategies to accommodate these additional expenses. As a result, residents could experience increased prices for everyday essentials, impacting household budgets and affordability, but in a different way. It is also important to keep in mind that businesses do not enjoy the same benefits as residents. They are required to pay for their own trash removal and their taxes support the public school system.

A disproportionate hike in commercial property taxes deters new businesses from establishing themselves in our community. A thriving local economy depends on a diverse range of businesses, providing job opportunities, stimulating economic growth, and contributing to the overall vibrancy of our town. When businesses face exorbitant tax rates, it hampers their ability to expand, hire more employees, or invest in the community, ultimately limiting job creation and economic development.

A vibrant commercial sector not only enriches our community but also plays a pivotal role in supporting local initiatives. Many businesses actively participate in sponsorship, charitable contributions, and community programs that benefit residents. Higher tax burdens potentially restrict businesses from engaging in such philanthropic activities, impacting the resources available for community programs and services.

We want to encourage residents to have a vested interest in fostering a business-friendly environment that attracts and retains enterprises, fosters economic growth, and sustains our community’s overall well-being. Striking a balance between fair taxation and maintaining an environment conducive to business prosperity is crucial for the collective benefit of residents and businesses alike.

In conclusion, decisions regarding commercial property tax rates directly affect the economic landscape of our city, including those of our residents. With a split tax rate, it’s imperative that we consider the broader implications and strike a balance that fosters a thriving local economy while ensuring the well-being and affordability of our community members, for both residents and businesses alike.

Sincerely,

Deanne Healey, Peabody Area Chamber of Commerce President

Brad Gosselin, Peabody Area Chamber of Commerce Government Relations Committee Chair