Quincy Quarry News’ Quincy residential property tax increase projections for 2024

— News about Quincy Massachusetts from Quincy Quarry News with commentary added

Enough already
A file photo

Quincy Quarry News’ long-awaited projections for property taxes increases for local homeowners come the fast approaching New Year have finally been cleared for publication by the Quarry’s Publisher.

The key reason this long-awaited feature exposé was delayed was that the team assigned to this story checked its prognostications thrice and in some instances even more.

Such efforts were only proper given the all but abject lack of transparency by the Koch Maladministration on most everything making this review difficult. 

Fortunately for the Quarry’s ever-growing legions of loyal readers, the Quarry is well-practiced at slogging through the weeds of the Koch Maladministration’s koch and mirroring its financial and other affairs.

Quincy Mayor Thomas P. Koch’s doppelgänger
An Easy Money Associates/Orion Pictures

Driving the impending and all but certain to be considerable property tax bills increases for local homeowners come Calendar Year 2024 will be care of the Koch Maladministration full-court pressing the all but invertebrate Quincy City Council to approve a duly calculated 9.7% spending increase for city spending from the final revised appropriation for the FY 2023 city budget. 

In turn, this record breaking going away City of Quincy spending increase sets the stage for ugly property tax bills to follow to fund this fiscal year’s record breaking going away increase in city spending.

A key driver for the Koch Administration’s typically two to three times greater spending increase in Fiscal Year 2024 than both nearby as well as peer communities is Mayor Koch’s long-ongoing addiction to borrowing so as to be able to fund his all but out of control spending habits.

While in the narrative of Mayor Koch’s FY 2024 budget book presents a dubious scenario that debt service will drop considerably in future years, the single biggest area of increased local taxpayer-funded city spending in FY 2024 is debt service.

Local tax dollars adding to global warming
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The City of Quincy’s budget debt service expense in FY 2024 will increase by $11.7 million, a just short of 25% increase from the city’s FY 2023’s previous record setting debt service expense as well as a third of the total $36 million increase in city spending for FY 2024.

Fueling this breathtaking increase in just debt service expense in FY 2024 arises from Mayor Koch’s long relying on low to historically unprecedented low interest rates in recent years to fund his profligate, if not also out of control, spending habits.

Trust me, we cannot afford not to borrow
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In fact, he is on record often enough as saying that interest rates were so low that as mayor he could not afford to not borrow money (and then spend it, ed.).

In turn, he has thus long relied on low interest rate short term borrowings for hundreds of millions of dollars to fund his all too often profligate spending habits.

At the same time, such debt is variable rate debt and the interest rates on the various tranches of these borrowings reset annually.  This, in turn, has fueled the massive boost in debt service expense as the short term interest debt payments paid out by the City of Quincy have roughly tripled over the past eighteen months or thereabouts.

Lenders always insist upon their cut
Image via Shutterstock

Further problematic, such borrowings do not require principal payments and such has so allowed Koch to long avoid duly paying the piper on top of the further well-known axiom that so relying on short term debt to fund long term spending is fraught with peril as interest rates can as well as all but invariably do vary in ways outside of borrowers’ control.

Even worse, not only are interest rates expected to stay at elevated levels for an extended period of time, they may even go up a bit more before they might then but merely start experiencing modest declines around midyear next year.

Reaganomics, Kochonomics — whatever …
An old meme

Further yet problematic, now opting to go with long term fixed rate debt to lock down interest rates would entail significantly higher debt service expense at this point and thus does not provide Mayor Koch with a way outta Dodge.

Even so, Mayor Koch has already as well as instead set the stage for the City of Quincy to have to issue significantly more additional debt during Calendar Year 2024, if not also considerably more debt yet in coming years.

Further future ugliness yet includes that Mayor Koch has already set the stage for a balloon payment annual principal debt payment increase of roughly $31 million on already issued debt hitting the fan come FY 2026 and then keep hitting it until the late 2030’s. 

It turn, such all but assuredly sets the stage for yet another significant property tax increase for local homeowners come Calendar Year 2026.

Bear markets happen …
A Stevan Noronha image

In short, while not exactly subprime mortgage borrowing circa 2008 or thereabouts, Mayor Koch’s borrowing strategy is close enough to convey what local taxpayers will be suffering in coming years. 

In years past, the Koch Machine did what it could to kick this can down the road, including drawing down already thin city reserves, so as to mitigate the pain for local taxpayers. 

That and so pretty much picking Peter’s pocket to pay Paul followed by then picking on Paul to then repay Peter, ad nauseam.

Now, however, the City’s Stabilization Fund — the city’s “Rainy Day Fund” — is at roughly no better than a third of what it should be per municipal finance “Best Practices.” 

Done to crumbs?
Image via mssymptoms.me

Similarly, other lesser financial cookie jars are largely tapped to but crumbs or at best are at their variously required minimums and thus not of assistance unless the Koch Maladministration cares raise the ire of those who insist upon such prudent reserves — for example, lenders.

Now, however, as Mayor Koch’s financial band-aids are mostly as well as painfully stripped away from the ongoing wounds of local residential property taxpayers, 2024 local property tax bill increases look to have to be ugly even given a near $10 million increase in funding from the statehouse, funds which one should recall are ultimately but some of the state taxes paid by locals coming back to the City of Quincy for Mayor Koch to then spend.

New Growth blight in North Quincy
A Quincy Quarry News file photo

In turn, barring reliance upon cookies jars unknown to the Quarry, even given extremely generous assumptions such as a onetime doubling of so-called “New Growth” tax revenue in 2024 given roughly 1,100 new and high-end for Quincy apartments coming onto the tax rolls care of just two unpopular outsized projects along with a guesstimated few hundred more also often unpopular new residential units scattered about the Q, the Quarry’s financial quants have so conservatively projected an average 2024 residential property tax increase of no less than around 7.7% given their thoughtfully designed as well as complicated algorithm.

Soon to be in the crosshairs of local taxpayers? A still image from a YouTube video

Even worse, per slightly less optimistic assumptions that are still generous to the Koch Maladministration, the Quarry’s financial and other affairs desk projects a plus and minus median residential property tax increase at 8.8% in Calendar Year 2024.

Further disconcerting is how commercial office space property tax assessments are likely to be seeing cuts given the near collapse in commercial property values given lingering impacts of the COVID-19 pandemic such as increased rates of working from home. 

Going once, going twice, sold for a song …
A Dan FlynnFlam image

For example, recent fire sales of one of the office buildings in the former State Street complex in North Quincy and another large office building in Crown Colony pose fresh comparables to behoove the City of Quincy’s tax assessor to significantly trim local large commercial office buildings’ tax assessments for 2024 or face property tax abatement appeals filed with the assessor by larger commercial office building property owners.

In turn, the resultant cuts in commercial property tax assessments one way or another given cratering commercial office building market values will require increases in residential property tax bills to cover the anticipated commercial tax revenue shortfall.

Complicated calculations
Image via Amazon

Given way too many variables to ponder, however, the Quarry’s quants did not endeavor to discern how much likely cuts to at least large office building property tax bills will fuel further increases to local homeowners’ tax bills that are projected above.

The only good, albeit ultimately but modest, news on this front is that commercial office space in Quincy makes up a but modest 11% fraction of the total local property tax base and thus the expected plummeting assessments of large commercial office buildings will not yield a brutally painful percentage increase in residential property tax bills even if still painful increases nonetheless.

Regardless, local homeowners will have to cover essentially all of the anticipated considerable drop in local commercial property tax revenue and which will surely continue for at least a few years going forward until local office building real estate market values might eventually perhaps recover.

Will Quincy taxpayers wreak revenge in 2026?
An old Universal Pictures image

And as for additional bad news, Prop 2 1/2 spending and tax limits will not protect local homeowners from ugly taxes increases for reasons too complex to address in this already lengthy Quincy Quarry exposé.

Finally, arguably the worst news yet the Quarry’s financial quants suspect that local homeowners are looking at a total increase on local property tax bills increasing by 25% to 30% in total over the course of Calendar Years 2024, 2025, and 2026 per leading indicator data available at this point.

In other words, local homeowners will continued be Q’ed in upcoming years.

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