With a deadline fast approaching to send out the city’s next round of tax bills, Boston business leaders and the Wu administration remained at odds Monday over the mayor’s contentious plan to hike commercial property tax rates and ease a sharp potential hike on homeowners and landlords.
Long-simmering tensions over the issue broke into the open over the weekend, with dueling “compromise” proposals that appear close but are just far enough apart on a key issue — what share of the city’s tax burden should be born by commercial buildings instead of residential — that the impasse continued.
After seven months of talks among City Hall, the state Legislature, and the business community over how to properly balance property taxes amid slumping office building valuations, four key business groups on Friday proposed a compromise: They’d support a temporary increase in commercial tax rates of 6.5 percentage points above current levels, or 181.5 percent of residential rates, and back off their insistence on cuts to the city’s $4.6 billion budget — a move they considered a substantial concession, especially given the city budget’s 8 percent increase from a year prior.
Then on Friday evening, at 5:18 p.m., city intergovernmental relations director, Clare Kelly, emailed the business consortium and Boston’s Senate delegation with a slight change: a commercial tax cap of 182 percent — half a percentage point more than business leaders had offered.
The average single-family home in Boston pays more than $6,000 a year in property taxes, according to state data. The different proposals would mean a residential tax increase of 8.5 or 9 percent next year. For the typical taxpayer, the difference between the two proposals amounts to about $21, according to the city.
But the gap — and the way it was communicated — signals that relations between Wu and business leaders remain frosty at best.
Business groups are disinclined to move further. Tamara Small, chief executive of real estate trade group NAIOP Massachusetts, said Monday that last week’s proposal of 181.5 percent was a “best and final offer.”
“Going beyond that percentage at this time would not be supported given the crisis facing commercial real estate,” she said.
For her part, Wu was upbeat, “hopeful that we will be able to reach a final resolution soon.”
“We are getting closer to a fundamental recognition that businesses and residents rely on each other for our economy to thrive,” Wu said.
They may have had a chance to hash it out in person.
Wu on Monday traveled to Toronto to attend the Greater Boston Chamber of Commerce’s annual City-to-City visit, where business leaders visit other communities to network and learn about how other cities operate. Chamber chief executive Jim Rooney moderated a panel featuring Wu and Mayor Olivia Chow of Toronto. Rooney said he and Wu are due to discuss the property tax issue on Tuesday.
But any deal will ultimately have to pass muster back in Boston and on Beacon Hill too. Since Boston already taxes commercial property at the maximum-allowable rate, increasing those rates further requires a home rule petition passed by both the City Council and state lawmakers.
That gives business leaders leverage to fight Wu’s plan on Beacon Hill if necessary, and while the House has already approved a version of her proposal, Senate President Karen Spilka has been far more skeptical. That skepticism appears to continue; in a statement Sunday Spilka’s office indicated she would side with the business cohort on the issue, saying “it will be difficult to get a final bill through the Senate without the full support of the business community.”
Wu’s next move is not yet clear. She wouldn’t say on Monday whether she’d agree to 181.5 percent, or stick with 182 percent, saying she’d need to speak first with city and state leaders, residents, and “all those who have been engaged up until this point.”
“We’re talking about asking every family in the city, on average, to shell out another $21 so that there can be additional decreases on the commercial side,” Wu said. “For many businesses . . . (a) change in the tax rate is not noticeable in their budgets. But for families, yes, $21 makes a difference.”
Larry Edelman of the Globe Staff contributed to this report.
Catherine Carlock can be reached at catherine.carlock@globe.com. Follow her @bycathcarlock.