Tuesday, February 27, 2007

No, Peter Berdovsky and Sean Stevens Don't Have Two Million to Give You

Yesterday I advised businesses to stay away from Boston if they want to preserve their bottom line. Because, you see, Boston will look for any opportunity to get money. If a company's promotion goes awry (Cadbury Schweppes, Sony, Turner Broadcasting), Boston mayor Thomas Menino will demand restitution from said company.

In the interest of fairness, I am posting Menino's argument regarding why the city is so financially strapped.

For years, Boston's mayor has complained about the city's limited means of raising revenue, a situation that has meant undue reliance on property taxes -- and contributed mightily to soaring residential property tax bills. He has railed to anyone who will listen about how, through income, corporate, sales , and excise taxes, the city brings the state $10 for every $1 it receives in local aid. He has vented his frustration at the need for state approval to impose local taxes, saying he's willing to take the heat for any tax decisions Boston makes if the state would only take its thumb off the capital city.

OK, I've done my Fairness Doctrine bit. Now let's reveal why this topic is on the table.

All of that meant it was a happy day at City Hall when Governor Deval Patrick recently unveiled a municipal assistance package that includes a proposal to allow cities and towns to impose added meals and lodging taxes as part of Patrick's effort to relieve pressure on property taxes. Menino pronounced himself "grateful to the governor," calling the proposal, which would let communities add up to 2 cents to the meals tax and up to 5 cents on top of existing hotel taxes, a "real strong program to help the taxpayers and homeowners in our state."

But apparently local control doesn't sit well at the State House.

House Speaker Sal DiMasi of the North End and Senate President Robert Travaglini of East Boston have both said there is little appetite for new taxes in the Legislature....

In 2003, Travaglini included the local-option tax in a municipal relief package the Senate passed that summer, and it has been part of two Senate budget plans during his tenure. Each time, however, the House has nixed the plan.

"The Senate wants to be helpful," said Travaglini spokeswoman Ann Dufresne. She said Travaglini has an open mind on all aspects of Patrick's municipal assistance package, including "giving communities the opportunity and flexibility to explore alternate revenue sources."

But the situation remains.

Sam Tyler , president of the Boston Municipal Research Bureau , a business-backed watchdog organization, says something needs to give. "The state revenue structure doesn't work well for a city like Boston, which is becoming more of a convention city," said Tyler.

To provide relief for property taxpayers, who accounted for 58 percent of the city's total revenues in 2003, more than twice that of any of the cities studied in the recent report, the mayor says the city needs to capture more of those convention dollars flowing through hotels and restaurants.

Yes, but who's going to hold a convention in Boston? I don't think Sony or Turner Broadcasting or Cadbury Schweppes will be scheduling a Boston stop any time soon.


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