Faced with declining revenues, cuts to local aid and rising costs, many Massachusetts towns are increasing hotel and meals taxes as well as overriding Proposition 2 1/2 to raise property taxes.
In Rockland, residents voted 2-1 in favor of a Proposition 2 1/2 override to build an $86 million high school. Marilyn Werkheiser, a member of the Rockland School Committee, told the Boston Globe that people are willing to invest in the future of their town. referring to the weak economy.
“I think people really understand the need to do these things [increase taxes] to make our town better.’’
At town meetings in Hudson, Wellesley and Bellmont, voters raised meals taxes. Town officials in Hudson said the .75 percent increase on restaurants would save town jobs. While some said that any increase in taxes would be unfair to restaurants, others noted that a .75 percent increase would mean just 8 cent more on a $10 check.
Below is a list of towns that have passed meals and/or hotel taxes: AMHERST, ANDOVER, AUBURN, BEDFORD, BLANDFORD, BOSTON, BREWSTER, BROOKLINE, CAMBRIDGE, CHELMSFORD, CHICOPEE, DARTMOUTH, DEERFIELD, DUDLEY, EASTON, EVERETT, FRAMINGHAM, FRANKLIN, GILL, HADLEY, HATFIELD, MEDFORD, MELROSE, MILLIS, MILTON, NANTUCKET, NORTH, ATTLEBOROUGH, NORTH READING, NORTHAMPTON, ORANGE, PALMER, PLAINVILLE, RAYNHAM, REHOBOTH, SAUGUS, SHREWSBURY, SOMERVILLE, SOUTHBRIDGE, SPRINGFIELD, STURBRIDGE, SUNDERLAND, TAUNTON, TYNGSBOROUGH, WEBSTER, WELLFLEET, WEST BOYLSTON, WEST SPRINGFIELD, WINTHROP WORCESTER.
Cross-posted on ONE Massachusetts.
Arlington Special Town Meeting approved both the hotel and meals taxes yesterday. Lexington Special Town Meeting takes both up on Wednesday.
Middleboro raised their hotel tax in town meeting…I imagine almost every town has taken advantage of the higher limits set in law.
In our case the Board of Selectmen didn’t want to have anything to do with it, so the chairman of our Finance Committee submitted a citizen petition article. The Chamber of Commerce organized against the article, brought out enough people to overwhelm a sparsely attended meeting, voted down the article, and went home.
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p>I had an interesting conversation with a friend of mine after the meeting who had voted no on the article. He believed that if the article had passed and any restaurant in town had gone out of business, the business community would have blamed the meals tax whether it was the real cause or not. He didn’t feel that the town could risk being perceived as anti-business when we’re already struggling to attract new business. I still haven’t seen any convincing evidence that their business would be impacted but I could appreciate his concern.
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p>The one group we both agreed would be hurt by the measure would be the waiters and waitresses whose tips would be marginally reduced in situations where the customer calculates a reasonable tip and then rounds up to an even number.
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p>I’m so glad I live in a town with a representative town meeting. Folks can organize and show up and speak their mind about any article, but only those who have been elected can actually vote.
In our town Selectman backed 4-1, with the opposing selectman announcing he had changed his mind on Town Meeting floor. FinCom Chair sold as 75 cents on a $100 meal, even though FinCom made no recomendation. Anybody that claims restaurants will close up and move out of town is a fool. We realize that there will be more local aid cuts coming down the pike. For those that want layoffs don’t worry they will come when the tulips bloom in the Spring!
Sab – about 50+/- communties out of 351 have passed this, more like 20%.
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p>My town is 96% residential. It would raise chump change and penaize the few restaurants there are – and we have no hotels.
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p>Gov. Patrick made a veiled threat when he came to the Cape, saying that IF a town didn’t pass these, well, then he guesses they HAVE enough money, and don’t NEED local aid…for us, not much of a threat, since we don’t get much anyway, but it was disconcerting language from a gazebo on a village green.
Of course Governor Patrick would make that threat. He loves regressive taxation and apparently derives an unseemly delight from the lives it destroys, in much the same way he seems to take an unseemly delight in his hack and slash approach to the budget – balancing it on the backs of the most vulnerable, destitute and oppressed of our citizens knowing all the while that many shall die because of it.
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p>Again, I note that Massachusetts has the resources, that this “fiscal crisis” is a fabrication, and that the legislators and Governor have the means available for not only closing the gap now, but generating a surplus:
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p>I noted this in 2006, but suspect it applies well also today:
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p>Raytheon and Fidelity barely pay taxes at all. The likelihood is that you have paid a far more significant income tax than they have. Your Democratic Party legislature gave huge tax breaks to Raytheon and Fidelity, created monstrous tax loopholes enabling the largest of corporations to dance around paying their fair share of the burden, and afforded monstrous tax breaks – to no one’s surprise – to their largest campaign contributors. Your total tax burden is quite likely greater than 8% of your paycheck, while for the wealthiest that figure’s only slightly more than 4%. Politicians and their fat cat contributors are having a rip-roaring party for themselves – and you’re the folks that are buying their meals and picking up their beer tab. It is time to decline the tab.
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p>Repealing the Raytheon and Fidelity tax breaks would generate more than an additional $220 million in revenue for the state. Closing corporate “combine reporting” loopholes would generate over $97 million for the state. Applying a transfer tax to sales of higher end real estate would generate over $500 million for the state. Repealing the sales tax exemption on services such as lobbying, legal and accounting services, engineering services, business consulting, public relations and financial management would generate over $530 million for the state. Implement a 30 cent per pound tax on the top ten carcinogens, and over $115 million in revenue would be raised. An intangible property tax on financial instruments of $2 per $1000 with a $50,000 deductible would generate nearly $500 million for the state. This yields nearly $2 billion in revenue raised without raising your taxes.
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p>Raise income tax to 6% and lower sales tax to 4%, and – through that alone – a very large portion of the voters in this district would know tax relief while overall revenue would be raised. Earmark but 20% of revenue raised by the sales tax to cities and towns, and your communities would have incentive to give tax relief as well. Raytheon paid only $456 in state taxes in the year 2000. How much did you pay? How much less could you pay with an efficient and fair tax plan? Payoffs for layoffs are killing public education, health care, police and fire departments. You’re being priced out of your homes to pick up the burden. There’s just no rational excuse for that.
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p>Allow me to also note:
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p>Commonwealth would save over $27,000 per consumer to provide for community based health care services rather than imprisoning consumers in nursing homes. Freedom for the more than 8200 wrongly deprived of freedom and liberty when community based services would quite nicely suffice would result in savings for the Commonwealth in the realm of some $221,400,000 per year.
Love to look at where you got them. I know some are available on the Tax Expenditure Budget site, but where did you find the numbers for Raytheon and Fidelity?
These were 2003 figures. I do not know 2009 figures.
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p>These figures were from the FY 04 Tax Expenditures Budget, item 2.401, and the Tax Equity Alliance Education Fund’s 2002 publication, “Potential Sources of Tax Revenue”
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p>The year 2000 tax figure for Raytheon was from United for a Fair Economy
and see if we can get updated numbers up on the ONE Mass website.
and provide the links, that would be great. I would love to read up on it. Thanks.
I’m working on retrieving the links. Alas, my old 2006 campaign website is down. Luckily, that was anticipated and I have the pages on my flashdrive. Will re-publish soon.
with opposition from locally owned resturants. Only one hotel in town.
but I really dont agree with the Meals Tax. In my opinion, it adversely effects small businesses like restaurants at exactly the wrong time. Also, is there any evidence as to how much this tax will really raise? Its a recession (at least it still feels like one, irregardless of what the economists on TV tell me), people are eating in alot more now.
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p>I totally agree that we need to generate revenue somewhere. Why not tax the utility companies. I have heard that as much could be raised by closing the telecom tax loop hole as could be covered by a meals tax. I think that tax is more fair in principle – they shouldn’t have tax exempt land.
“is there any evidence as to how much this tax will really raise?”
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p>Yes, there are estimates from the State for this: http://www.mass.gov/Ador/docs/…
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p>“I have heard that as much could be raised by closing the telecom tax loop hole…”
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p>We already did that, actually.
though I think you overstate the impact. But, it is less regressive than the property tax, and less regressive than cuts in local services.
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p>It’s worth thinking about what would have been better, but remember, these cities and towns don’t have the power to tax utility companies more, or institute a graduated income tax, or anything (really) other than what they are doing.
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p>Only the legislature can fix this problem.
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p>Disclosure: I reluctantly voted for this provision at my town meeting last Monday.
of towns that increased their room and hotel taxes.
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p>But our local anti-tax extremist has managed to get a referendum on the ballot to overturn the meals tax vote.
Sounds like “extremist” is the operative word here. I don’t get how paying 35 cents on a $50 bill would drive customers out of town.
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p>The discourse around these meals taxes shows how hard it is to have a rational discussion about taxes.
Westborough Town Meeting voted down the meals tax and approved the hotel tax, on the somewhat dubious premise that we want to soak out-of-towners, but not ourselves.
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p>I would have gladly paid the meals tax, not just because I think I could afford it and because it’s on discretionary spending, but because it gives me a way to help fund some reasonable services and school expenditures that are otherwise on the chopping block.
If you can afford to pay twice the cost of the same meal by eating out, you can afford to pay 2.05X the cost.
…getting to that conclusion would require one to see beyond the word TAX, which many people seem remarkably incapable of. I kind of want to set up a “Free Ice Cream – Pay Only the Tax” booth for a day and see if people can bring themselves to get over their taxaphobia. (You guys aren’t invited, though. You’d skew the results and eat all the ice cream.)
Hope you don’t mind if we use this idea as a public education event. Imagine such a booth in the back of every town meeting. (Imagine the fun in turning over the tax money we collect to the Department of revenue.)
The local-option meals tax isn’t 2.5 percent (the “0.5” in the 2.05 times the cost of eating at home).
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p>It is 0.75 percent, less than 38 cents on a $50 meal.
It’s so nice of you to give a list of the communities who have passed an additional meals tax. Now I know where not to eat when I’m out and around. Just hope Salem doesn’t do it; I’d miss my Taco Bell cheesy fiesta potatoes…
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p>Speaking of Prop 2 1/2 overrides, did you know that Danvers Town Meeting just passed a high school renovation project that won’t require a Prop 2 1/2 override? While other towns who want to take advantage of SBA funds are trying to raise property taxes to pay for their share, Danvers is fitting the project into its regular budget. And renovating, instead of insisting on new and outrageously expensive, like Newton.
I don’t know what they get for local aid as opposed to other surrounding towns. But I think you have to agree that Newton is an example of excess not an example of what the vast majority of towns are facing. I think we do better looking at the rule rather than the exception.
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p>Do you believe the issue to be that towns want to build mega excessive schools so they are raising the meals tax?
I really doubt most sane and rational people will spend $1-2 in gas to drive another 10 miles to eat at a restaurant that they don’t really like as much, just to save 35 cents. That is, unless they are hardcore against taxes. Oh, wait…
A hypothetical. You have two choices:
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p>In town A, you’re looking at, a meals tax of about 3 cents on your Taco Bell potatoes.
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p>In town B, you’re saving 3 cents in meals tax money, and paying an additional 7 cents in gas tax money to replace the gas you burned to get there
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p>I’m surprised at your eagerness to pay more taxes than necessary, I must say.
Wednesday night, Lexington Special Town Meeting passed meals (effective 1/1/2010) and hotels (effective 7/1/2010).
You missed Natick in your list. Fall Town Meeting started here on 10/20 and that same night we (very narrowly) passed the meals tax. The following session (10/22) we (again very narrowly) did not pass the hotel tax.
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p>The feeling on the winning side in both cases seemed to be that the meals tax was gonna be 75 cents on a fancy $100 dinner out, and virtually negligible in most other cases (McDonald’s, local mom-and-pop storefront restaurants, etc). On the other hand, the hotel tax would add a couple of bucks a night to local hotels which could put us at a competitive disadvantage to hotels in neighboring towns with similar rates.
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p>Now, technically the meals tax hasn’t taken effect yet, so your list is technically accurate as far as we are concerned. Articles passed at Town Meeting don’t take effect until 1 week after the close of Town Meeting, and we haven’t finished yet!
I’d like a show of hands. How many people inquire what the hotel tax is when booking a room? How many people have decided to stay in another community when they heard the answer?
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p>If the information was readily available, I could see that some people might choose differently, if the difference was maybe $10-20 more per night. But the fact remains, the hotel tax is not something that people get ahead of time, and a few dollars difference isn’t going to be enough to make someone decide to pick another less convenient hotel in another community.
That was my feeling as well. I ended up on the losing side of both votes, though.
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p>The concern, though, had nothing to do with the tax appearing on the bill. It was more that, if substantially similar hotels in Natick and Framingham were compared, and Natick cost $106 and Framingham $104, then the Natick hotel would lose out.
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p>And true, 2% is a bigger difference than 0.75% – and it’s 2% of larger numbers (in general). So I kinda get that, even if I do still disagree on grounds much like what you enunciated.