Only 25% of the amount collected would be directed into a fund earmarked to reimburse towns for property tax abatements. Towns already impose a higher rate of property tax on commercial property. So it would seem that towns that don’t have restaurants or motels would seem to be hurt even more by the local option taxes since they are already missing out on the higher property taxes on commercially zoned property and now are missing out on the local option taxes.
However, this excerpt indicates that the law does not necessarily restrict the revenues to only be distributed to towns where the hotels and restaurants are located. The excerpt actually indicates that the revenues are earmarked to towns that provide abatements under Ch. 59 sec. 5 clauses 41, 41B and 41C. In looking at those clauses, they are all targeted exclusively to abatements aimed at people over 70. So the specific property tax relief provided by the MPA is entirely directed at those over 70. I’m not sure why only seniors should benefit from the local meals and room occupancy taxes. I have a problem supporting yet another bill that targets property tax relief to seniors on top of the Circuit Breaker they already enjoy without targeting any of the breaks to those under 70.
The remainder of the fund would be added to the local relief, but only for towns that elect to impose the additional meals and occupancy tax. But how would this amount be divided up? What about a town that has very few restaurants and hotels and generates very little additional revenue? Does that town get only the amount generated in that town or do they get a ratable share based on population, area, budget, or some other factor? Is there discretion in determining how to distribute that money?
I assume that the Dept. of Revenue would be responsible for collecting the revenues and keeping track of how much revenue was generated in each town. What if the restaurant or business were to abide by the MA law but challenge the additional local tax? Would the town have to rely on the DOR to collect the revenue?
A Virginia law was recently struck down as violating the state constitution because it delegated a local transportation authority the discretion to impose a new tax. Would the MA law be subject to a similar challenge? Federally Congress cannot delegate the power to impose a tax, the tax must be imposed by a Congressional statute. I’m not sure the law is developed sufficiently in MA but I also don’t see why the same principles that apply Federally and in VA wouldn’t apply to MA. If the individual town’s power to impose the tax was challenged would that be defended by the DOR, the individual town, or would the AG have to step in to uphold the statute?
I’m not sure if any of these points are deal breakers to anyone, but they are certainly factors to consider. While allowing towns to impose a 1% meals and room occupancy tax certainly seems simple and attractive, the reality is that there are several questions, both substantive and procedural, that I would need answers to so I can seriously consider the issue.
by this argument that since cities and towns wouldn’t all benefit from the meals tax, or wouldn’t benefit equally, that it shouldn’t be an option for the rest of them. Why should Lincoln (say) determine what Somerville or Boston do?
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p>As far as mechanism and enforcement, that discussion seems to be rather far afield from whether the tax is desirable or not. Are you really suggesting that such a thing is unenforceable? How then are such taxes administered in any number of other places? Red herring, anyone?
Why should we have a mechanism to collect more revenues with the express purpose of reducing property taxes if its not well designed to actually reduce property taxes. 25% of the revenues are targeted to towns the provide property tax abatements TO SENIORS ONLY, so that right there is another pander to the over 70 crowd that will not benefit any low or middle income property owners in MA. And the other 75% will be distributed to towns without any requirement of reducing property taxes for anyone. Whats to say that the legislature will reduce local aid by the same amount that is distributed thereby doing absolutely nothing to reduce the property taxes for the large majority of MA property owners.
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p>On top of that, if the remaining 75% is distributed to towns that already have prospering motel and restaurant industries then those towns are already benefiting from the higher property tax rates imposed on commercial property. I’m not sure how that helps those towns that have high property taxes but little industry. I would have to know more about the manner in which the 75% is distributed. I’ve looked for this information, but I figured that perhaps I could go to a blog filled with cheerleaders for the MPA and find someone who actually has more than a general understanding of it.
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p>Then again, yesterday you referred to Combined Reporting as closing corporate loopholes here http://vps28478.inmotionhosting.com/~bluema24/s…
Thats the same silly talking point that many have been repeating so I wouldn’t expect the in depth analysis tax policy to come from you. Anyone else?
needs to be reined in. No one will care what you have to say if you can’t say it in a constructive way.
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p>Just a friendly observation.
I apologize for raising my points in a non-constructive manner. However, I would like someone who supports the MPA to respond to these points. I would like someone to explain why a statute that only targets revenue to cities and towns that give property tax abatements to those over 70 and gives the rest of the money as general local aid will actually decrease local property taxes. Nothing in the MPA prevents the legislature from merely decreasing local aid as a result of the additional fund created to channel revenue to cities and towns. Nothing in the MPA assures that taxes for the vast majority of MA property owners will actually decrease.
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p>I would also like to respond to Charley’s post by noting that there are cities and towns in MA besides Lincoln that have few restaurants and hotels and also many low or middle income people under 70. Do those towns get anything from the MPA?
I have not explored the details of the proposal but I would question the following logical thread ..
Municipalities have become accustomed to ever increasing tax bases in recent years as they have been free to mark up valuations at will on the back of the “supposed” housing boom.
These times have ended.
However the spiral in the costs of services that they are accustomed to providing is not broken.
So … municipalities will be left with a choice of either raising more money or cutting some services.
Experience leads one to believe that one of these options will be pursued without consideration for the other.
Wouldnt this proposal you are discussing give them an option other than further extorting struggling homeowners?
While I wouldnt expect it to LOWER the property tax burden, I would expect that it might at least slow the INCREASES.
No?
thats exactly my point. There is nothing in the local option tax in the MPA bill that would necessarily cause the revenues for cities and towns to increase. Please see my reply below.
about property taxes on powerlines would benefit Lincoln.
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p>These points aren’t the point of the MPA. Many cities and towns are hurting for the resources to police their neighborhoods, respond to fires, repair their buildings and hire teachers, and the MPA is a way to give cities and towns more tools to fix their own local problems. While it may not help some towns, it will help several towns and that makes it worthwhile.
will not necessarily increase the revenue that goes to all cities and towns. The local tax option will only necessarily increase the revenues to towns that give property tax abatements to people over 70, but those towns revenues will be left at a net even amount while shifting taxation from property owners over 70 to people who stay at local hotels and eat at local restaurants. The rest of the money will go into a fund that is distributed to cities and towns, but I don’t see anything in the MPA that would prevent the legislature from simply reducing the Local Aid by the same amount as the distribution of the local option fund. The local tax option will not decrease property taxes without the cooperation from the legislature, and even if that cooperation is present for year 1 there is nothing preventing that cooperation from disappearing in year 2+ leaving the towns in exactly the same pinch they were in and increasing the $ available for distribution at the state level. The local option taxes portion of the MPA will not achieve its goal because its distribution mechanism is fundamentally flawed.