In 1978, the citizens of the Commonwealth of Massachusetts adopted a constitutional amendment authorizing the General Court to classify real property into as many as four separate and distinct classes and thereafter to tax such classes differently. In 1979, the General Court adopted an act which implemented the amendment. The act enjoyed popular support as a means to prevent the shifting of taxes from business property onto residential property as a result of court-ordered revaluations. Classification does not raise additional dollars from the property tax, but serves to redistribute how much levy will be raised from each class. Preferential tax treatment for any class of property is not mandated, but the choice of distributing the levy burden among the various classes remains a local option.
The Commissioner of Revenue supervises the implementation of property classification. After the Commissioner has determined that a city or town's assessed values represent full and fair cash values, the Assessor classifies all real property according to use. Local elected officials are then permitted to determine, within limits calculated by the Commissioner, what percentage of the tax burden is to be borne by each property class.
The determination how to allocate the tax burden by class is made annually. In Worcester as in other cities, the decision to allocate tax burdens is made by the City Council, generally in November.
Massachusetts law provides for the implementation of the classification process through three phases: first, every city and town must value all taxable property at full and fair cash value; second, each city and town must classify every parcel of property according to use; third, each city and town which has revalued and classified may allocate its tax levy among the various classes of property. The first and second steps are mandatory. The third stage, determining whether to allocate the tax burden by class, is optional with each community.