Well Northampton Mayor Mary Clare Higgins finally got her way–the state has approved a local option meals tax of .75% or seventy-five cents tax on a one hundred dollar meal. Higgins has made this one of the hallmarks of her administration. Going back half a decade or more she has been aggressively promoting the meals tax as a local option for communities to raise funds and reduce the tax burden on ordinary homeowners. The estimate is that Northampton would see upwards of about $615 thousand per year on sales of about $82 million.
So where's the beef? Why is Higgins now hedging on implementing the tax she lobbied so long and hard for? Political expediency? She suggested during the last city council meeting that the council could delay implementing this tax until January at a cost to city taxpayers of $100-$200 thousand or more.
Moreover, the folks who were so visible in lobbying for the recent override of Proposition 2 1/2 to increase property taxes were notably absent from the last council meeting, save for Pam Schwartz. I thought the YES group promised to continue lobbying for increased city revenues, but apparently few felt strongly enough about the meals tax to support it publicly. With the prospect of the meals tax looming the downtown restaurateurs showed up in force for the city council meeting to oppose the measure and they basically spoke unrebutted.
Higgins also suggests that, "we could have a conversation," about designating a portion of meals tax receipts for promoting downtown. I think that is one of the BID's purposes, no? Instead of committing additional funds for downtown promotion perhaps the city's financial share of its BID membership should come from meals tax receipts. Through the memorandum of understanding the city's fiscal share of the BID is about $85 thousand annually; $35 thousand for the BID and $50 thousand for the Academy of Music respectively, not counting in-kind contributions like fees collections or nonfinancial contributions like a new street sweeper.
One reason downtown restaurateurs might oppose the tax is because it brings with it concentrated costs with diffused benefits because tax revenues raised can be used as city officials see fit, for the schools, public safety, the DPW, etc. With the BID there are more diffused costs and concentrated benefits, that is, the money is kept downtown while part of the funds originate from city taxpayers. Moreover, city officials have little say in how the funds are expended with the BID unlike meals tax revenues.
Of course the meals tax is not a cost borne by meals providers but rather it is merely collected by them. And it comes along with the state increase in sales tax, which also applies to meals. However, basic economic theory holds that increasing taxes reduces commercial activity so the restaurateurs have a beef (as do homeowners who recently saw their property taxes increased).
I can't say whether or not I support this tax as I know people who believe they will be harmed by it. But I know I would like to see the burden for city services spread to other sectors of the city besides property owners. If the BID brings with it all of the marvelous things its proponents promise, the additional .75% meals tax by itself should only marginally impact overall sales.
Finally, perhaps some of the money generated by the meals tax should be designated to address the commercially generated organic waste restaurants create that end up in our landfill. Unless I read it wrong according to the recently released landfill option study for the city the composting operation on Burts Pit Road was suspended in 2004. Based on population the city's commercial waste is conservatively estimated to contain about 27% food waste or about 0.57 pounds per person per day and the commercial food generation waste rate is between 8.6 and 9.7 tons per day. That's a lot of compost that could be processed and sold. This waste originates not only from restaurants, but also from grocery stores, schools, colleges, hospitals and other group living quarters like nursing homes. So how about it? For those clamoring for other waste options perhaps a portion of the meals tax should pay to mitigate the flow of garbage into the landfill through solid waste solutions like industrial scale composting.
