Spending Taxpayer Money like Water - As Housing Costs and Property Taxes Rise to New Heights
We are a city of very smart residents, many working in positions that require active professional engagement (see chart below). Alas, too few of us are paying close attention to how the city is spending our tax dollars, and how quickly our taxes are growing despite the fact that we have more and more city residents and commercial developments to help pay the bills. The above charts, graph and map provide insight on this (Y23 - see link below), as does therecent city property tax letter. We as a city are spending this property tax money like water and our residential property tax burden has gone through the roof making housing costs more expensive for nearly everyone.
THE CITY IS SPENDING $$ AT AN ALARMING RATE and there is less and less transparency
Many of us just received our FY23 Property Tax Update and the news is not good, particularly when increased property tax percentages are addressed, much less averaged out over the last five years. In the case of one three family home owner living on a fixed income (in Cambridgeport), her taxes went up 9.7% - way above inflation. A three decker in Mid-Cambridge went up 23.7% over 5 years or 25.9% since 2018. In the case of two single family home owners (one in West Cambridge and one in East Cambridge, the five year percentage increases on their property taxes were 26.8% percent increase and 38% increase over the same 5 year period respectively. The multiplier effect is not being considered in all of this. Yes, the City council voted on October 3, 2022 to decrease taxes by 1% on residential properties ($0.06) and commercial properties ($0.85) but that is nothing comparable to the huge tax increases we continue to see. The anticipated budget increase of 6.5% for &23 is massive - and is not only impacting housing costs negatively (higher and higher property taxes that increase rents) but also is likely one of the reasons we are seeing fewer and fewer of our local businesses able to survive.
And, what is happening with our money? The City (with City Council approval and encouragement) is spending as if there is no tomorrow. Money to them is like water and it is driving up housing costs to an untenable degree.
OF FURTHER NOTE: Most of us are suffering through the noise and inconvenience of new commercial and residential building work or renovations all year round. One would think that this might come back to us in lower city taxes. Just the opposite. And, the notion that an enormous increase in the value of our homes is a benefit to the vast majority of our residents is specious at best. This is worse than "paper wealth," because our taxes rise as a result, and because the one way we can access that money is to sell one's home (or mortgage it, but then one has to pay it back). Everyone still has to live somewhere, and one cannot live in a safe deposit box. Unless we uproot ourselves and move somewhere else entirely, leaving all the benefits of Cambridge behind, we probably can't afford a new place that is as livable as the places we are living already.
We are tired of people blindly repeating such foolishness as property value increases being a plus. Such people don't stop to think about what they're saying. The major monetary value of one's home to those who are living there is that one is not at the mercy of ridiculously increasing property values to the same extent as someone who rents, and home owners here should be very grateful for that. It's the only reason many of us can still afford to live here. If we had our druthers, property values would have increased far less so that more of of our friends and neighbors could afford to stay here. That would be real value, something people who see everything in monetary terms don't seem capable of understanding. Those of us who live on fixed incomes, have salaries that have not kept up anywhere close to inflation and/or are just making ends meet before all these housing cost rises are suffering significantly.
Cambridge, we noted above, has many very smart residents, working in professions that call for regular assessment of data and close analysis of key results (professors, scientists, managers, others - see chart below). We should be expecting the same professionalism, care, insight and oversight on the part of our city Councillors and city leaders. The kind of rampant spending we are seeing today, our untenable housing cost increases (based on a tax structure dependent on ongoing property value increases), and so few tenable socially important results is making city decision-making increasingly untenable.
Please urge the new City Manager and our Councillors to look at the larger picture and put our fiscal house in order. It is time to take a deep dive into how the city collects and spends our money. The long time policy of massive commercial development in order to keep residental rates low is NOT working anymore. New commercial development is driving up values so far that even our low rates leave our property owners (including landlords) with huge bills. The balance is out of whack. What the city needs to do is to actually plan as opposed to throwing money at problems as they crop up.
Link to City Y-23 tax rate newsletter: https://www.cambridgema.gov/-/media/Files/financedepartment/propertytaxnewsletters/FY23/fy23taxratelettertocitycouncil.pdf
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