Worcester Tax Rates May Drop, But Home Values Up 1o%

WORCESTER, MA — Worcester may have lower property tax rates ahead in 2022, but that doesn't mean bills will actually go down.

The Worcester City Council will hold the 2022 tax classification hearing on Tuesday. During the hearing, the Council will review possible tax rates for next year — and historical trends show the rate may drop.

In recent decades, Worcester has elected to shift the tax rates away from residential properties and toward commercial and industrial properties (CIP). That means lower bills for residential owners, higher ones for CIP owners.

According to estimates provided to City Council ahead of Tuesday's classification hearing, the minimum share of the total levy residential property owners would have to shoulder would mean a rate of $15.06 per $1,000 of assessed value, and $33.83 for CIP properties.

The 2021 tax rate was $16.28 per $1,000 for residential properties and $36.20 for CIP. The 2021 rate dropped 72 cents for residential owners, but rose $1 for CIP properties compared to the 2020 rates.

But even if the residential rate goes as low as $15.06, rising property values may wipe out any savings. Worcester conducted a full revaluation this year, and the assessed value of an average priced home in the city rose 9.6 percent to $294,325. So a tax rate of $15.06 would actually mean an increase of $61 for the owner of a home of average value.

Some communities in Massachusetts elect to use a single tax rate across all property types. Members of the business community typically advocate for Worcester to move toward a single rate. Worcester would need to set a single rate of $19.33 to pay for city services in 2022. Under that rate, the owner of a home of average value would pay $5,689 in property taxes in 2022 compared to $4,432 — a difference of $1,257 — under the lowest rate with a shift toward CIP properties.

The 2022 tax classification hearing is set to begin at 6:30 p.m. on Tuesday.