New England News
3:25 pm
Tue March 26, 2013

Exception To Tax Cap Law Sought For Casino Property

The city of Springfield is seeking an exception to Proposition 2 ½ , the Massachusetts property tax cap law, when it comes to casinos.

   An $800 million resort casino could mean tens of millions of dollars annually in additional property taxes for Springfield.  But Mayor Domenic Sarno said the city will not get the full financial benefits from a casino development unless a change is made to Prop 2 ½.

   Sarno and members of the city’s finance team were on Beacon Hill Tuesday to testify at a hearing by the legislature’s Joint Committee on Revenue.  They urged the committee to endorse a bill that would permit the tax cap to be exceeded, but only on property that is subject to a gaming license.

   Prop 2 ½ caps property taxes in two ways.  It imposes a tax levy ceiling of 2 ½ percent of the total assessed property value of a municipality.  In addition, taxes cannot increase by more than 2 ½ percent annually, plus growth for new construction.  Because  plunging property values since the recession have put Springfield at its tax levy ceiling, the city does not  get the full tax benefits of new construction.

   According to figures from the city Assessors’ Office, Springfield has lost out on $30 million in new revenue since hitting its tax levy ceiling three years ago.  The assessors project Springfield could lose  $18 million in fiscal year 2017, the first year a casino could be taxable, if the city is still at its levy ceiling.

   Sarno said the city has endured six consecutive years of budget cuts as first state aid was cut , and later property tax revenue dropped.

   The bill to create an exception to Prop 2 ½  pertaining to casinos was filed at the city of Springfield’s request by its two State Senators, James Welch and Gale Candaras.  If it is passed, any community that hosts a casino could take advantage of it.

   Barbara Anderson, head of Citizens for Limited Taxation opposes a casino exception to the property tax cap law.

   Two casino operators have proposed projects in different parts of downtown Springfield. West Springfield and Palmer are also part of the completion in western Massachusetts for the lone gaming license available in the region.

Related program: