Before I go on with today's rant, I want to make something clear. I am not a vehement anti-tax person. Yes. Taxes are not low and fees went up over the past few years. Granted we did have a deficit to plug recently and for that reason it was acceptable. A more prudent legislature may have asked their benefactors to take a back seat for a few years and lay off the patronage through the crisis. They did not and frankly, what's done is done.
That being said, Governor-Elect Patrick's new nominee for Sec. of Finance and Administration (fyi, also plays a big part in Control Board policy) Leslie Kirwin has already said things that bother me. Echoing Patrick's own calls for more local options tax rights, Kirwin is on record in today's Globe as supporting such a move. For those of you that don't know, local options are taxes exercised by individual municipalities on "meals, hotel rooms, and other services" as 22 News puts it. That could potentially include cities' own income and sales taxes too.
I use cities deliberately because, despite a rash of Proposition 2 1/2 override failures, in primarily smaller communities, these locales will not take action that will endanger their still superior fiscal condition compared to say Springfield, Lowell, or even Boston. As stated in an earlier post Revenue, Revenue cities need the money most desperately. They will install these taxes and only hurt themselves. Customers will decide to frequent the slightly further 99 Restaurant in East Longmeadow rather than the one at the Eastfield Mall, for example. I know it sounds stupid, but it is TRUE! Having worked each no-tax holiday the past three years, it is packed with people desperate to show up "Uncle Sam" as one customer of mine put it, the inaccuracy of his comment notwithstanding. Either a local sales or meals tax will repeat this occurrence manyfold.
The same holds true for an income tax. Watch what is left of Springfield's middle class vanish when the day comes for that. Boston would suffer a similar fate, although its millionaires on Beacon Hill may swallow it, the dwindling middle class will jump ship, and the lower classes will probably be exempt anyway.
The sole exception to this is a hotel tax. That tax only brought it about $800,000 to Springfield this past fiscal year. Giving the city the right to boost it (within reasonable limits) can do no harm. It is unlikely that Springfield, being the center of the metro area will suffer if its room taxes are higher than neighboring cities. Its hotels are brand names and near the MassMutual Center and Hall of Fame.
As stated above, I am not against new taxes and revenue specifically for municipalities. And if today's rant was convoluted (as mine often are), let me put it this way. Aside from property taxes which are fairly rigid, Mass communities, especially the cities, cannot afford to be competing with each other over taxes. Again going back to Revenue, Revenue, should the legislature enact say a 1% extra meals tax across the board and let the cities/towns keep it, I'm there. But putting that power into Council Chambers and Town Meeting halls will be a catastrophe in the long run. It may seem undemocratic. However, many cities are still wounded beasts who will gnaw off their own leg to escape the trap of revenue shortfalls.
Its fiscally unwise long-term and proven so in communities elsewhere in the name. More importantly it is failure and we cannot allow that.
That being said, Governor-Elect Patrick's new nominee for Sec. of Finance and Administration (fyi, also plays a big part in Control Board policy) Leslie Kirwin has already said things that bother me. Echoing Patrick's own calls for more local options tax rights, Kirwin is on record in today's Globe as supporting such a move. For those of you that don't know, local options are taxes exercised by individual municipalities on "meals, hotel rooms, and other services" as 22 News puts it. That could potentially include cities' own income and sales taxes too.
I use cities deliberately because, despite a rash of Proposition 2 1/2 override failures, in primarily smaller communities, these locales will not take action that will endanger their still superior fiscal condition compared to say Springfield, Lowell, or even Boston. As stated in an earlier post Revenue, Revenue cities need the money most desperately. They will install these taxes and only hurt themselves. Customers will decide to frequent the slightly further 99 Restaurant in East Longmeadow rather than the one at the Eastfield Mall, for example. I know it sounds stupid, but it is TRUE! Having worked each no-tax holiday the past three years, it is packed with people desperate to show up "Uncle Sam" as one customer of mine put it, the inaccuracy of his comment notwithstanding. Either a local sales or meals tax will repeat this occurrence manyfold.
The same holds true for an income tax. Watch what is left of Springfield's middle class vanish when the day comes for that. Boston would suffer a similar fate, although its millionaires on Beacon Hill may swallow it, the dwindling middle class will jump ship, and the lower classes will probably be exempt anyway.
The sole exception to this is a hotel tax. That tax only brought it about $800,000 to Springfield this past fiscal year. Giving the city the right to boost it (within reasonable limits) can do no harm. It is unlikely that Springfield, being the center of the metro area will suffer if its room taxes are higher than neighboring cities. Its hotels are brand names and near the MassMutual Center and Hall of Fame.
As stated above, I am not against new taxes and revenue specifically for municipalities. And if today's rant was convoluted (as mine often are), let me put it this way. Aside from property taxes which are fairly rigid, Mass communities, especially the cities, cannot afford to be competing with each other over taxes. Again going back to Revenue, Revenue, should the legislature enact say a 1% extra meals tax across the board and let the cities/towns keep it, I'm there. But putting that power into Council Chambers and Town Meeting halls will be a catastrophe in the long run. It may seem undemocratic. However, many cities are still wounded beasts who will gnaw off their own leg to escape the trap of revenue shortfalls.
Its fiscally unwise long-term and proven so in communities elsewhere in the name. More importantly it is failure and we cannot allow that.
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The Massachusetts Municipal Association included this issue in a recent publication (PDF) outlining ten "principles for a stronger commonwealth." From the doc:
"At a minimum, the [MMA] recommends that cities and towns be authorized to adopt a local option meals tax of up to 3 percent, which would immediately allow many communities to diversify their revenues and reduce their reliance on the property tax. Further, the Administration could work with municipal and state stakeholders to examine other ways to diversify local revenue sources to provide an alternative to the property tax."
Maybe we could dismiss such taxes after giving them a try and watching them fail utterly. But until then, they could be worthy of an attempt.
Communities are right. They do need more diversified sources of revenue. An entry I'm working on disucsses how to a degree Springfield's fiscal problems were unavoidable. I fear local option not because it is unnecessary taxation, but because it could retard development in cities while encouraging it in the wealthier towns. However, if an increase in the meals tax was statewide and retained by the community in which the eatery is, similar to the excise tax is collected statewide and retained by the community in which the vehicle is registered, my fears would be allayed. Everybody wins, except for restaurant patrons I suppose.
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