Both Representatives were asked a similar question in the interviews done by demredsox. Rep. Marzilli gave an answer that, well, didn’t answer the question. He noted that he previously supported closing corporate loopholes and then said how nice it was to have Deval Patrick as a governor, but he didn’t say anything about what he would do as our Senator regarding this legislation. I remember a similar answer at the Lexington forum. I would like a clear answer from Rep. Marzilli about what he plans to do in the Senate regarding these three MPA provisions.
In Rep. Murphy’s interview, demredsox writes that the Representative thinks closing the telecom loophole is a good idea but he “does not support meals and hotels taxes. It is not fair to cities and towns because some have larger revenue potential for meals and hotels.” Since this wasn’t a taped interview, I’d like Rep. Murphy to correct this if it is wrong, but I also remember a similar answer at the Lexington forum.
If this answer is accurate, I really have to disagree with the “not fair” argument. I can’t think of a single local taxation scheme, existing or contemplated, that equally benefits every city and town. It’s certainly not that way with the property tax. Burlington is the only community in the senate district with a Burlington Mall, yet we don’t deny the town the tax revenues it generates from that commercial property because it isn’t “fair” to the communities that do not have a mega-mall. I’d like Rep. Murphy to elaborate and support his position.
My own take: The state needs to provide a variety of revenue generation and cost-saving tools so that each city and town has something to implement in order to ease the residential property tax burden. Closing the telecom loophole and allowing the meals and hotel options are just a start. The next Senator should be leading the way to investigate even more options for municipalities.
Hope the Reps. M & M both respond.
Here is another slant on the fairness argument. The cities and towns most likely to benefit from a meals tax are the ones that already have lots of commercial property, and extra real estate tax receipts, to begin with. The local option tax does nothing for towns that rely primarily on the homeowner property tax. You may disagree with the argument, but its not irrational.
The point is to broaden the tax base by giving cities and towns more flexibility in how they raise revenues.
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A portfolio of options may not be perfect but is likely to be less unfair than property-tax-only regime. Which is not very equitable.
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Also, “fairness” ought to take into account that those large cities with hotels and restaurants, which might benefit the most from a meals tax, have correspondingly greater needs as well.
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None of that is as good as local aid distributed through an equalizing formula, but might still be part of the solution.
I understand what you are saying, but I think that framing this as commercial haves vs. have-nots misses a lot of gray area.
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Take Arlington and Lexington as examples. Both have much smaller commercial tax bases than neighboring Burlington and get the majority of their revenues from residential property taxes. However, both towns have quite a few restaurants, so they have the ability to take advantage of the local meals tax option. It’s not quite the same revenue potential as Burlington, but the revenue they realize might be more critical for their fiscal situations.
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Another point I’d like to make is that the situation changes with time. Arlington underwent a restaurant renaissance in the mid-1990s. The town is in a much better position to benefit from a meals tax than it was just 15 years ago.
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I’m still hoping to hear from the candidates…
a local options meal tax to kill a future restaurant renaissance for an area.
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If Arlington has a local meals tax and Burlington doesn’t it could hurt restaurants in Arlington.
At 1%, the tax on a $50 tab is fifty cents. Double that for a 2% tax. Is that really enough to have a serious impact? I know it wouldn’t affect my behavior.
I am committed to restoring the partnership between state and local government, which is the only way we can enhance and protect local services and ease the residential property tax burden.
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I support all four parts of the Municipal Partnership Act, and am an original sponsor of two of them, the telecomm property tax exemption and the local option meals/hotel tax. I am also the leader in the House in the effort to close other corporate tax loopholes and generate new revenue that will allow us to increase local aid.
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The Telecommunications Property Tax Exemption would generate $78 million in annual property taxes that would go directly to municipal government. I was one of the original sponsors of this legislation.
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The Local Option Meals and Hotel Tax would generate another $120 million for local governments if every community adopted a 1% meals tax. I was an original sponsor of this bill, too.
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No legislator has done more to close corporate tax loopholes. In 1992, I initiated the corporate tax disclosure law that would require every publicly traded corporation to publicly disclose its state tax payments. I worked with the Tax Equity Alliance of Massachusetts (TEAM) to bring this question to the ballot and it was approved by the voters, but then immediately repealed by the legislature.
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I filed legislation to close tax loopholes beginning in 2000 and have led the floor fight in the House every year since. I initiated the strongest loophole closing measure, “combined reporting,” two years before Governor Patrick was elected and since filed an identical measure.
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I support raising new revenues but we also have to squeeze the inefficiency and waste out of government. I wrote the law that abolished Middlesex County government, a relic from the Colonial era that put a burden on communities through the assessment it took from their treasuries. I wrote the law that abolished the Emergency Finance Board, which tied local governments in red tape when they embarked on capital construction projects.
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And don’t lose sight of the pension provision in the Municipal Partnership Act.
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I am a strong supporter of the new law that requires the worst performing local pension funds to join the state system and allows other to join at their own volition. The investing power of the state allows it to earn a better return on investment than all but a handful of the local systems. Since we are legally and morally committed to making sure that every pensioner gets what they were promised, we need to make sure that our investments are sound.
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If Lexington’s retirement system had the same return on investment as the state, it would have an additional $10.2 million in its system. Instead, Lexington will have to cut that much plus interest from its future spending to make up for the shortfall.
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If Arlington earned the same return on investment as the state, it would have an additional $11.6 million. It too will have to cut services to make up for the shortfall.
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The failure of local retirement systems to earn the same results as the state over the past ten years will require a diversion of $3 billion away from our schools and public safety programs, programs that cannot afford further cuts.
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I am disappointed that the law did not make more of the local pension systems stronger. Yet two of the other candidates in the race for Senate actively opposed even the limited measure that was enacted this summer.
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I have initiated two other measures that will help our cities and towns balance their budgets. Health Care for All and I have filed legislation that will reduce the growth in the cost of health care by improving payment methods, enhancing transparency, promoting healthy behavior and creating accountability.
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I have also included a provision in my major energy bill that would earmark 25% of the revenue generated under the Regional Greenhouse Gas Initiative to local government for energy efficiency and renewables. Those funds would be distributed through a mix of grants and zero-interest loans to help communities reduce their energy costs and greenhouse gas emissions.
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We are the second wealthiest state in the richest nation on the planet. We can do a lot better at providing local services without adding to the residential property tax burden.
Thank you, Rep. Marzilli, for taking the time to compose this thorough answer and for your support of this important legislation.
Pleased to see you take the time to articulate your views here.