Wary on tax plans
BY SHANNON BARRINGTON FOR THE SUN CHRONICLE
Sunday, March 4, 2007 12:33 AM EST
Gov. Deval Patrick's proposal to allow local taxes on meals and hotels is getting a mixed review in the Attleboro area. Some restaurateurs oppose it, and area lawmakers are split on the idea.
"I don't think we need to go up to 7 percent," said Tony Canova, owner of Attleboro's Colonel Blackinton Inn. "Even though it's a tax and the money goes to the government, I think the perception of the customer is that we've raised prices, and that some of that money is going into my pocket."
Patrick introduced his Municipal Partnership Act last month as a way to help the state's cities and towns balance their budgets without raising property taxes.
The bill would give municipalities the option of adding a 1 percent to 2 percent sales tax on the existing 5 percent state tax.
Under the plan, 25 percent of the new tax revenues would be used to reimburse cities and towns for property tax relief for qualifying senior citizens. The remaining 75 percent would stay in the community to help pay for municipal government.
Canova was concerned that the taxes would not be uniform through the state.
"I think if you're going to do it, everyone needs to do it," he said. "Maybe not as severe, but it would be like with the smoking ban. North Attleboro had the ban and Attleboro didn't, so people would just go one town over."
Ultimately, the smoking ban was applied universally throughout Massachusetts.
The meals tax proposal has its supporters and opponents among the area's legislators.
Rep. Steven D'Amico, D-Seekonk, said the plan makes sense for communities such as Seekonk that are on the Rhode Island border.
"A lot of people eating there are coming from Rhode Island," he said. "One or 2 percent on top of our 5 percent is still less than their 8 percent in Rhode Island."
D'Amico said he also favors the bill because it allows communities to decide whether to enact the tax.
"It gives communities an option for taking pressure off the property tax," he said.
D'Amico said the tax would help communities raise money to undo some damage caused by budget cuts. In the case of Seekonk, the funds could be used to rehire teachers who have been laid off recently.
State Sen. James Timilty, D-Walpole, also supports the plan.
"I certainly would be willing to allow each community to enact a local options tax," he said. "It would be raising some money in a time when municipal budgets are strained almost to the breaking point."
But two local Republican lawmakers say the plan could wind up costing the municipalities money. They argue that some of the additional tax would go back to the state.
Rep. Jay Barrows, R-Mansfield, and Rep. John Lepper, R-Attleboro, said that although taxes would be higher, the 25 percent given to the state could mean less money ending up in the community.
"Right now, towns are given the option to tax hotels up to 4 percent, but all of that stays in the town," Barrows said. "With this plan, you do the math. You take 5 percent, you multiply by 0.75, and you end up with 3.75. You get a reduction."
Lepper said the plan's formula may not have been intended.
"That may be a drafting error, but it needs to be looked into," Lepper said.
Lepper said he didn't think the plan would accomplish the governor's goal of lowering property taxes.
"There are already some local options taxes in place. If you look at the communities that have the opportunity to use them and the ones that don't, I don't think you would find that the communities that do have less property taxes," Lepper said.
Barrows echoed Canova's fear that diners could just go to communities without the tax.
"I think the meals tax would kind of pit the communities against each other," he said.
Barrows said chances for the new tax option are slim.
"I don't get the sense that it's going anywhere," he said.
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