City stumps for meals tax

July 6, 2007
By

David Taber

The director of the Mayor’s Office of Neighborhood Services appeared before the Jamaica Plain Neighborhood Council JPNC at its June meeting to rally support for proposed state legislation for a 1 percent local option restaurant meals tax.

Neighborhood Services director Jay Walsh said the legislation, which bears a striking resemblance to a proposal for a 1-2 percent local option meals tax proposed by Gov. Deval Patrick in his Municipal Partnership Act, was originally proposed by Mayor Thomas Menino five years ago.

“We have become overly reliant on property tax,” which has gone up 78 percent in the last five years, Walsh said.

The meals tax, by contrast, would be a way for the city to generate income from residents of surrounding municipalities who take advantage of Boston’s resources, he said.

“Two-thirds of restaurant revenue is generated by people who live outside of Boston,” he said.

According to estimates put forward by the Mayor’s Office, the city would generate about $20 million in 2008 if the meals tax were implemented.

In a vote, the JPNC expressed unanimous support for the meals tax, though members did express some reservations about details of the plan.

If the savings materialize, Walsh said, the mayor is committed to using 100 percent of the revenue generated for property tax relief.

At-large council member Jesús Gerena said he would prefer to see some of the revenue go toward providing social services. In particular, Genera said, he would like to see the city’s Youth Fund infrastructure increased in order to expand the youth summer jobs program.

“Is there any chance of lowering the property tax instead of by 20 million to 16 million?” Gerena asked.

Noting that JP restaurants are probably more commonly frequented by local residents than downtown eateries, Area B council member Steven Backman said he thinks it would be more equitable for a 2 percent meals tax to be leveed at downtown restaurants and no tax leveed in the outer neighborhoods.

“On the margins it effects how much people can afford to eat out,” he said.

According to estimates from the Mayor’s Office, the tax would cost the average Boston resident about $25 a year. The average savings for Boston property owners would be $200.

The JPNC meeting was the final in a series of 19 community meetings across Boston city hall staff have attended to explain the meals tax proposal.

It has been widely reported that, because of opposition from State House Speaker Sal DiMasi, neither the governor’s nor the mayor’s meals tax proposals are likely to pass during the current legislative session.

Walsh refused to comment on what role the community meetings are intended to play in a long-term political strategy to get a local option meals tax passed.

“We don’t want to speculate” on the fate of the bill, he said. “The ball is in [the legislature’s] court to deal with it.”

He did say he hoped JPNC members would make good on a commitment they made as part of the motion they passed to, “pick up their phones and call their legislators,” urging them to pass Menino’s bill. He also hopes others follow suit, he said.

Walsh also presented on another bill the mayor has proposed that is mirrored by language in the municipal partnership act. Menino’s HD 3492 would close telecommunications tax loopholes that allow telephone and Internet companies to avoid taxes other utilities pay for the use of utility poles.

The governor’s version of this bill, which removes a tax exemption originally enacted in 1912 to spur growth in the incipient telephone industry, is widely believed to have a better chance of passing.

State Rep. Liz Malia, who co-sponsored both bills said the legislature often sees multiple bills recommending similar remedies when there is widespread interest in an issue.

“Through the legislative process they are usually incorporated into the overall bill,” she said.

While she supports the meals tax as an ameliorative measure, given the state of the Commonwealth’s budget, Malia said she thinks it is a mistake to hold income tax at 5 percent. She described the income tax rollback, which, beginning in 2000, cut the income tax rate from 5.75 percent, as a “$3 billion give-back” the state cannot afford. Malia said sitting on the House Ways and Means Committee and the Joint Committee on Mental Health and Substance Abuse has afforded her a stark perspective on the effects of defunding social service programs. Prison conditions have deteriorated, and mental health services, substance abuse services and services for the homeless have all suffered she said.

“We have really seen a disintegration of social services because we’ve had tax give-backs,” she said.

She favors increasing income tax because it is more equitable than use tax, she said, but raising income tax levels is “a hot potato.”

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