Taxing Times

26Nov09

Wakefield, Massachusetts votes itself a new tax
Democracy in action
The 2009 Regular Town Meeting proved to be a taxing one – and not just for those who hung in for the entire three and a half hours. Town Meeting backed two new local taxes: one that will bring the tax on a restaurant meal in Wakefield to 7 percent and another that hikes the hotel occupancy tax from 4 to 6 percent. So it was a taxing Town Meeting even if you didn’t sit through it.

Over the years, Wakefield voters have shown themselves to be reliably frugal when they go to the polls, handily voting down Prop. 2½ overrides and outsized budgets. Town Meeting, on the other hand, has tended to be looser with the public purse strings.

So this week, Town Meeting approved a .75 percent local option meals tax that will be added to the present 6.25 percent meals tax that was just increased from 5 percent last August 1. At the same time, the state hiked the sales tax from 5 percent to 6.25 percent.

The state also decided to give cities and towns the “option” to levy an additional .75 percent local meals tax, making it 7 percent in communities that approved it. Wakefield is now one of those communities. The state will collect the additional .75 percent along with its own meals tax and then return the local funds to the town on a quarterly basis.

But not everyone at Town Meeting was on board with the new tax.

“The state does not honor its commitments,” Former FinCom Chairman Marc Luca said, pointing to Chapter 70 local aid and the Quinn Bill as examples. He also noted that the state had just hiked alcohol and tobacco taxes. “The taxes just don’t end,” Luca observed, and most would be hard-pressed to prove him wrong.

Luca also pointed to the number of restaurants on Water St. alone that have failed recently, notably Toody’s and Dettorre’s. “I just don’t see the economic environment being able to sustain new businesses at a higher tax rate,” he said.

Several speakers in favor of the local option meals tax suggested that consumers “wouldn’t notice” an additional 37 cents on a $50 restaurant bill or even 75 cents on a $100 tab. But let’s not forget that just last August the state hiked its portion of the meals tax from 5 to 6.25 percent. It’s easy to say that you won’t notice one or the other, but these increases do not exist independent of each other.

Wakefield’s meals tax has now increased 2 percent since last August. That’s $2 on a $100 restaurant bill. Will people notice that? Maybe it won’t matter to the childless yuppie couple with the six-figure income, but what about the blue collar working class (assuming they’re still working in this economy) family of five? Will they miss the $2?

Grafton St. resident Dan Brown noted that the meals tax in Massachusetts had its genesis as a “temporary” tax. He also reviewed the history of other “temporary” taxes and fees in the state. On the question of whether a local option tax could be repealed if the state failed to give all the money back to Wakefield, Brown did not mince words.

“Hell will freeze over before this or any other tax is repealed,” he said.

When the Board of Selectmen held its public hearing on September 14 on the local option meals tax, no residents showed up, despite the fact that the hearing was well-publicized, including a front page story in the Wakefield Daily Item. Then, at Town Meeting, Wakefield citizens made a decision to vote themselves a new tax.

Will the day come when the residents of Wakefield, Massachusetts will decide that they are paying enough taxes? Maybe. But as of this week, that day has not yet arrived.

[This column originally appeared in the November 19, 2009 Wakefield Daily Item.]

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