Outlook bleak for local option levies

April 17, 2009
By

David Taber

JP reps. on state budget: Oh, dear

Mayor Thomas Menino has a posse—including the Jamaica Plain-based Hyde Square Task Force—at least as far as advocating in the state legislature for local-option taxes is concerned, and he’ll need it.

According to JP’s state reps.—Jeff Sanchez and Liz Malia—advocates of the taxes are going to have to stick together. At the state level, they said, there is very little appetite for the local-option taxes, especially in the more rural western part of the state. The taxes would be attached to hotel room and restaurant meal prices, with the money going back to municipalities.

Menino has been encouraging the state legislature to grant municipalities the right to impose a restaurant meals tax at least since 2002. The state law would allow cities and towns to impose an up to 2 percent tax on meals.

The state’s projected shortfall is larger than the city’s entire $2.4 billion projected budget. According to estimates provided by the coalition the HSTF youth are working with—the Youth Education Collaborative—local option taxes could provide about $85 million for Boston. Given the scope of the state funding issues and state government’s traditional skittishness about imposing taxes, Malia said it makes sense to focus on larger revenue generators.

“As far as raising revenue, we are going to have one shot and it is going to be a tough battle, so you want to do something that is broad-based,” she said.

The mayor has supported the tax as a way to make up for state cuts to local aid, and at an April 7 hearing of the legislatures joint Committee on Revenue he said the need is especially urgent in the current economic crisis.

“The more urgent the challenges, the more clear it becomes that cities and towns need the authority to diversify our revenue sources,” he said.

And with this year’s city budget taking a significant chunk from the Boston Public Schools (BPS) budget, high school students are getting in on the act. Initial budget projections this year included a $107 million BPS budget shortfall. When the mayor filed his budget April 8, the school budget allocation had been increased from $787 million to $817 million.

The Youth Education Collaborative—which includes seven groups along with HSTF—is advocating a 2 percent meals tax, a 1 percent hotel tax and a 10 percent off-street parking excise tax for commercial vehicles.

The three taxes would generate about $85 million for Boston, according to the coalition’s press materials.

The Jamaica Plain Neighborhood Council also recently sent a letter to legislators urging passage of the local-option taxes.

One place where the mayor and the coalition differ is the coalition wants all but $23 million of that—half of the 2 percent meals tax—to be dedicated to BPS.

The mayor “wants the flexibility to use the funding where needed,” said Nick Martin, a spokesperson from the Mayor’s Office.

But HSTF youth organizer Jen Tejeda played down differences with the Mayor in a Gazette interview. When the coalition presented their proposal to the mayor, he told them “education is one of his priorities,” she said.

Tejeda said it makes sense for the meals tax to support schools because it gives youths the chance to help finance their own education.

Ayan Hussan, a youth from another coalition group, the Boston Student Advisory Council, told the Gazette that the coalition is currently working to form ties with other youth groups across the state to advocate for the local option taxes.

While Malia and Sánchez said they applauded the youths’ efforts, they were pessimistic about the strategy.

“For Boston, a meals and a hotels tax would be very helpful. There are other parts of the state they are not going to really do anything for,” Malia said.

Legislators who represent districts “west of [Interstate] 495 say, ‘You are going back in our pockets,’” State Rep. Jeffrey Sánchez told the Gazette. “Any time you talk about taxes in the State House, it is like you are talking about the antichrist. Its like, ‘Ok, why don’t you take some of the traffic and the social problems—build a little housing out there?”

Both Malia and Sánchez said they hope to see a wide-ranging debate about revenue sources as the House begins to consider its Fiscal Year 2010 budget proposal.

“We need to look at it from the top down, considering all revenue options from income [tax increases] down to local options,” Sánchez said.