by @BarryRafkind in Announcements, City Finances
Posted on August 31, 2009 at 11:37 am
Last Modified on September 3, 2009 at 9:32 am
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On Aug 27th, the Board of Aldermen raised taxes on meals by 0.75% and on hotels by 2% effective Oct 1st, according to Danielle Dreilinger’s report today on Boston.com. These taxes will generate an estimated $620,715 in revenue. One wonders why this item did not appear on the meeting agenda (pdf) and also how the extra money will be spent?
These new taxes come on the heels of significant changes to the city’s parking regulations meant to boost revenues. How will all of this affect local businesses? Are these the last major changes needed to keep the city afloat this year, or will there be more to come? What do you think?
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Now I will not be eating out in Somerville.
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75 cents on a hundred dollar tab? Janine, you’re going to burn more money in gas driving to Inman Square than you will on an average dinner.
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Tricky: I would rather cook at home than spend money in MA. In fact, all the things I need to get for Baby #2 will be purchased at the Babies R Us in NH and not in Everett. And I am trying to see how I can buy my new car in October in NH instead of this state.
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Janine, it doesn’t matter where you buy your car, you will still pay MA taxes when you register the vehicle at the RMV. And remember to bring enough cash or a personal check for that, they do not accept credit card, as I found out the hard way.
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Well, good luck with that. You’re going to burn a fair amount of gas heading up the road, not to mention other abstract intangibles: not having to spend two hours driving to NH and back is worth far more to me than whatever I’m going to save by driving up there.
But back to Barry and the big question: if this wasn’t on the agenda, why not?
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I would rather burn the gas than have MA get my money from taxes. Anyway, I have friends in NH who are going to get the stuff and bring it down when they visit. I don’t need it all right away. I also want to now why this was not on the agenda. What else is this crew hiding from us?
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Cut city services now or we’ll end up worse than California. We’re headed there now. The city is squeezing home owners (property taxes), residents and visitors through a small strainer at this point – how much more can we take?
I have heard that the city is taking in a lot less in parking tickets than they had estimated when they jacked up the time/meters. LOL. Good. Problem is that they are now floating the idea of eliminating the 33% owner-occupied property tax exemption. That will go over real big.
Cut the pensions, renegotiate contracts and cut all non-essential services. Then see where we are.
Janine, I too head to NH for everything now. I own another piece of property close to NH anyway, so whenever I go up to check on things I bring the truck. Who wins? NH.
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Xumi, which reliable sources inform you about the revenue generated by recent parking policy changes? And where did you hear anything about a proposed property tax exemption?
Which non-essential city services would you cut? I’m sure it sounds much easier than it is to cut pensions and renegotiate contracts.
You’ve complained before about all the free-loaders in our society, so how can you defend the practice of going out-of-state to avoid paying sales tax? Although I can see how MA loses by you doing this, what do you mean about how NH would win? NH certainly doesn’t “win” sales tax on your purchases.
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Barry, as long as MA gets zero percent of the money NH wins. There are many people driving to NH to make purchases. I saw the parking lot for Rockingham Mall on Sunday and it was all MA plates.
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Janine, I don’t get it, how does a tax loss for MA translate into a win for NH?
If you fill up your gas tank to go to NH, then MA will at least get your gas tax.
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Depends on where you bought the gas, Barry. I filled my car up in NH while I was there.
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Barry, not every town raised the meals tax. I would go eat in those towns.
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Barry, sorry… can’t say where I get my reliable information, but suffice it to say that I know the guy… behind the guy… BEHIND the GUY. Trust me when I tell you that the city is less than happy with the ticket revenues so far this month and watch out for the removal of the owner-occupied exemption. Remember.. guy behind the guy… behind the guy. Nev-ah been wrong yet.
Non-essential services? I’d start with the DPW. Then I’d go back and renogotiate on the excessive OT and details for cops. I’d cut that way back. If we need more cops hire them – it’s more efficient than paying 1.5 or 2x the rate.
NH wins because NH businesses win, so the state of NH wins via lower umemployment rates as those businesses need more employees to service all of us coming from MA. MA loses as many people will do anything to avoid the excess taxes and fees.
If I can pay 6.25% to eat in Arlington or Belmont or Burlington – why would I stay in Somerville to eat at 7.0%. The only people that lose here are the folks who cannot afford to be mobile and… yes… the restaraunt owners in Somerville. So… ultimately the city when it gets LESS revenue.
I am here to be your oracle… so fire away if you need more enlightening.
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Building part of a budget on human foibles and stupidity(sometimes my own), as I’ve said publicly and to the Mayor’s face, is not only a bad practice, but could lead to even more cuts in services and layoffs in the not too distant future. Believe it or not, for the vast majority of humans, our behavior will change after enough monetary punishment.
So let me say it again. Don’t bank on that expected windfall of parking and traffic fees and fines as a way of filling the city’s budget gap and keeping the “expected” city services going.
That strategy is like hoping to win this weeks lottery to pay next weeks mortgage payment.
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Honestly, if people want to go up to New Hampshire to prove a point and FEEL like they are saving a few $, go for it. Massachusetts employs thousands of residents from neighboring states who pay income taxes to Massachusetts. I imagine it balances out in the end. There are bigger things to get worried about than what state is getting whose money. NH has higher real estate taxes; NY has higher sales taxes.
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Meghan, NH has higher real estate taxes because they pay for better services (like schools) with it. In fact, the people I know who live in NH and work in MA are happier with the schools and services they get for their kids. In MA, you have people moving out of towns like Somerville once their kids are in school to better towns with better schools. I, for one, am thinking about this since I have a toddler and another baby due in December. If I am paying for my kid to go to a parochial school, then why don’t I move to Arlington to Westford and have my real estate taxes be used for the schools.
And Joe, you are dead on with the raising of the taxes and fines fixing nothing. I choose not to eat in Somerville if and when we go out because they raised the tax without saying anything first. The only money Somerville will get from me is my real estate tax and when I have to purchase new parking permits. It deserves nothing else.
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Janine/Joe, agree with both of you. You see it time and time again; people shift their behaviour if the fines/fees are too steep. Someone in city hall figured that they were tagging X cars per hour, so increasing the hours (and rates) would be a linear progression. It’s not. The real rate of cars being tagged now is (X -(all the pissed of people)) = CITY LOSES Revenue.
Meghan, how does MA raising the sales tax, booze tax, meal tax, etc… make any difference to those who live in NH and work in MA? They’re not shopping here and now… we’re not shopping here either (we’re going to NH). In the end; MA loses.
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Directly from the NH Dept of Revenue (9% meal and hotel tax. just saying.):
Meals and Rentals Tax
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Statute: RSA 78-A
Administrative Rules: Chapter Rev 700
What is it? An 9% tax is assessed upon patrons of hotels and restaurants, on rooms and meals costing $.36 or more. An 9% tax is also assessed on motor vehicle rentals and campsites.
Note: Motor vehicle fees, other than the Motor Vehicle Rental Tax, are administered by the NH Department of Safety. For more information on motor vehicle fees, please contact the NH Department of Safety, 10 Hazen Drive, Concord, NH 03305. (603) 271-2382.
Who pays it? The tax is paid by the consumer and collected by operators of hotels, restaurants, food service, room rental, and motor vehicle rentals.
When is the tax due? The tax is due on the 15 th day of the month following the taxable period. Electronic filing, via touch tone telephone and personal computer, are available to Meals and Rentals Operators. A paper return is not required if filing electronically, but operator’s must retain the meals and rentals worksheet. Electronic filing is required unless your taxable revenue is less than $25,000 in the prior calendar year. Operators with taxable revenue over $25,000 in the prior calendar year will not be allowed to retain their commission unless they file electronically. Approved seasonal operators must file reports for each month of their approved season even if no tax is due.
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Meghan, what’s your point? No one is going to NH to eat or stay — they’re going up there to buy large items and booze. Plus, Somerville has a 14.25% hotel tax – so no one is coming here to stay. We also have an income tax. Remember?
People like to purchase items like booze up in NH. They’re just following what the democrats are doing in avoiding paying the booze tax. See Michael Rodriges (D- Westport) for more information – he knows all the specials up at the NH state liqour store.
Progressives = tax my neighbor to give to me.
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Sorry the thread was titled “Aldermen Raise Meals and Hotel Taxes” and the first comment was about someone no longer eating in Somerville. I’m merely showing that the tax is actually lower in Somerville. The Alderman approved a meals tax increase from 6.25% to 7% and a hotel tax increase from 4% to 6%. I’m pretty sure that 6% is not the 14.25% you mentioned and I’m also pretty sure that 7% is less than 9%. If that’s not what we are talking about then I apologize but maybe we should retitle the original post.
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Meghan- the hotel tax itself is 7% and is usually added to a city tax too. Next time you stay in a hotel look at the invoice. And people are making comments about the various taxes and fees that were raised not just in Somerville on the post so I see no need to rename it.
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Meghan, you do realize that the city tax gets put on top of the state tax? The state allowed each city the ability to raise the meals tax by a maximum of .75 to 7% (add 6.25 to .75) and 4 to 6% (on top of the state hotel tax). This city decided to max out both taxes. We only really have 2 hotels here (LA Quinta and Holiday Inn), so I have no idea where the projected money is coming from. It’s BS.
I have to ask…do you work? I have to wonder why anyone would choose to pay MORE taxes. You do know on your state tax form that you can choose to pay an additional amount of tax. You can. Do you do that every year? If not, you really should.
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Of COURSE I work; I have worked every year since I was old enough. I believe I might just see things differently… I see the federal shortfall as directly affecting the state shortfall which then directly affects the city shortfall. I don’t think it’s the taxes that are screwing us over. I won’t go on and on about this because I think it’s clear I see it differently than others in this thread and I’m not going to change any minds. But I will ask this… how would YOU get more money into the city without cutting too many services? Were you at the City of Somerville meeting where the city folks laid out exactly what they did and citizens were able to provide input and ideas into what they could have done differently? If not, you really should.
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Meghan, you asked “…how would YOU get more money into the city without cutting too many services?” Therein lies the rub. You can’t get more REVENUE (more money) into the city, so you need to cut EXPENSES (many services). Kitchen tables economics here.
We need to cut the city budget – Curtatone has no options now. He has max’d the taxes he can get out of residents and there is no flood of new revenue out there anywhere. Assembly square and any revenue from Ikea are years away. He screwed the pooch here, by not cutting services and praying that the state would bail him out. This state is broke thanks to Deval and the government is broke thanks to Obama. There is no more money and at some point they’re going to have to stop printing it.
What would I cut? I already mentioned cops use of OT/details (did you see who the highest paid people are in this city – most of it via OT!??), next cut all services that do not benefit LEGAL CITIZENS of this city and then – if we’re still broke – cut all services that are not vital to running a city (cops/firefighters, snow removal, trash). Run the city lean.
If the mayor doesn’t do that then he can peek into the future by looking at all the cities in California and he can count on a serious backlash when the city goes completely broke. People need to wake up to the fact that there are no more “revenue opportunities” out there.
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I fail to see how Obama could have caused our current state in the 8 months he has been in office. That just doesn’t add up. And the City of Somerville actually has cut a number of positions (including some from police and fire). I also don’t see how the fire department is non-essential in one of the most densley populated cities in the country. Lastly, the City of Somerville actually has reserves and is more conservative in their spending than you might think.
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Meghan, I think you misread my post – actually I didn’t word it all that well, so my mistake. What I meant when I posted “..cut all services that are not vital to running a city (cops/firefighters, snow removal, trash).” is that cops/firefighters, snow removal, trash are vital services – cut everything else. I guess my yelling last night at John “Why the Long Face?” Kerry about healthcare and his being MIA as a state senator just tuckered me out.
Let me ask; if this city is so fiscally responsible then why are we broke – and more importantly why did the mayor max out all “revenue opportunites” (taxes)? I know the mayor and to date he has yet to make the hard cuts/decisions that will be needed. At some point he is going to have to give up the idea of taking Capuano’s seat (Schilling will grab Kennedy’s seat now) and act like a mayor and not a politician.
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I tend to agree with Meghan on these postings. Everyone else seems nearly willing to cut off a leg if it will traffic their money to any place other than Somerville or Massachusetts. If this is the case, why don’t you just move? It would certainly be a great long term investment, especially with the trends in gas prices and tax increases.
The gut of the problem is that the individual is selfish and/or demands ultimate control over everything (i.e. choose how and where their taxes go). Unfortunately, this is not a practical means to provide services and funding to the wide range of residents and visitors in most communities.
The true key to success is change. Not judicial change, not legislative change, not executive change. But social change. It is our responsibility to change the way we think and behave if we want to change the way we live.
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Witt: What exactly has Meghan said that you agree with? Besides stating some percentage numbers regarding taxes, I see nothing to agree with.
I pay real estate taxes on my house and imagine that this tax will be raised. Our family currently is a two income family but this will change in December when we have our second child and I leave my job for good. My family will be making tougher decisions other than whether or not we go out to dinner tonight.
And Meghan, if the city really does have reserves, why hasn’t the mayor exhausted those instead of raising fees and taxes?
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Witt, this is a scary line here “…gut of the problem is that the individual is selfish and/or demands ultimate control over everything…”. If I read yor correctly then I see someone who doesn’t believe in capitalism and who seems to think that individual freedom of choice is not a good thing. Did I misinterpret that? If not, can you expand on your theory for what would be an ultimate form of government. I have a feeling I know where you’re going and – if correct – then I believe you’re the one who needs to move.
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Witt, this is a scary line here “…gut of the problem is that the individual is selfish and/or demands ultimate control over everything…”. If I read your correctly then I see someone who doesn’t believe in capitalism and who seems to think that individual freedom of choice is not a good thing. Did I misinterpret that? If not, can you expand on your theory for what would be an ultimate form of government. I have a feeling I know where you’re going and – if correct – then I believe you’re the one who needs to move.
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ooops…. sorry for the doublepost. The PC I am on is super slow… maybe Obama will have a Cash-for-Clunker-PCs program???
Yes… WE CAN keep printing money!
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The ultimate form of goverment doesn’t exist. It never has, and it never will. Every society in history has failed regardless of their political philosophies.
The basic point is that there are ideal solutions and there are practical solutions. Striking a balance forces us to trade-off advantages of each possible solution.
I believe very much in democracy and government by representation.
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I also want to note that I have found the comments very informative, so thank you everyone for that.
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Barry’s initial question still remains unanswered: how did this not appear of the agenda for the Board of Aldermen’s meeting?
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In a brief email conversation with BOA President and Ward 4 Alderman Walter Pero, I asked him why these tax levies weren’t on the agenda. He answered saying that they were part of the finance committee report. Sounds to me like they were trying to hide these controversial votes from the voters. Politicians who do that kind of thing don’t usually last very long.
First, the City pushed its parking regulation changes through a quietly announced Traffic Commission meeting, now they pass tax increases hidden behind a committee report. This is tyranny, not transparency.
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Maybe the BOA has a “do as I say not as I do” policy for making an agenda.
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More like “do as Joe says, not as the voters want”.
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Aha, you’re on to something. But none of the (alleged) news sources in this town couldn’t be bothered to provide a breakdown of who voted for this.
I know the cliches: Journal writers couldn’t find City Hall on a map, the News staff were in Moultonborough, NH for the week, except Billy Tauro, driving around Ward One with a camera, a police scanner and a defective computer keyboard – get that exclamation point key fixed already!!
So who voted aye or nay?
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From the Somerville News:
Ward 5 Alderman Sean O’Donovan joined Roche in voting against the new meals tax.
and
The new hotel tax rate passed unanimously,
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So much for the “Do as Joe says” angle…
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