Oct 22, 2025
Cambridge businesses are facing a 22% increase in commercial property tax rates, a sharp rise that small business advocates say threatens their survival, according to discussions at a Monday Cambridge City Council meeting.
“We ultimately make decisions about the overall operating budget, and then, as part of that budget, we are setting where the revenues end up landing,” Cambridge City Manager Yi-An Huang told the City Council. “A lot of that, given the economic conditions, is landing on the tax levy, which is why, over these last cycles, we were seeing the tax levy increase higher than the budget increase.”
Huang said the increase is necessary to fund the budget approved in June, which included a 3.8% operating budget growth that resulted in an 8% tax levy increase. Huang told the council that even with zero budget growth, contractual obligations, inflation and health insurance costs would still require revenue increases.
“The proposed 22% hike more than doubles last year’s already drastic increase,” Kieran Kelly, associate director of Cambridge Local First, said during Monday’s City Council meeting. “The city attributes this to declining office and lab values, but raising rates at precisely the moment when these sectors are struggling burdens where resilience is weakest, penalizing small businesses for economic trends that are beyond their control.”
Cambridge businesses already pay an unusually high share of the city’s tax burden, with a 66% commercial and 34% residential split that exceeds neighboring communities, Kelly said. Boston draws only 58% of its property taxes from commercial sources, while other nearby municipalities collect even less from businesses, according to Kelly’s testimony.
“Our businesses are not asking for special treatment, just fairness and a seat at the table,” Kelly said.
Denise Jilson, executive director of the Harvard Square Business Association, acknowledged that the tax rates for fiscal year 2026 are “probably locked in” and urged the council to engage more closely with the business community as it develops the fiscal year 2027 budget.
“I can’t imagine having another year, next year, the way we’ve had this year,” Jilson said.
Vice Mayor Marc McGovern pointed to the city’s extensive services, including free after-school programs and transportation that other communities don’t provide, as examples of what tax revenues support.
“We do a lot of incredibly wonderful things in this city that people, I think, over the last 40 years have grown to expect and take for granted,” McGovern said in the meeting. “And now, they don’t realize that these things cost money and where that money comes from.”
“These are good moments for us, once we understand where the rates land, to have a conversation about the budget and to ensure that we continue to get input and engagement, especially as we move into the next budget process,” Huang said.
