75 cents on a $100 restuarant tab doesn’t sound like much

( – promoted by Mike “DD4RP” Rossettie)

And in reality it isn’t. The Dept. of Revenue has estimated that Reading would receive between $150,000 and $175,000 from the local meals tax option per year.

As many on RMG know, that will not solve any municipality’s budget problems. With benefits increasing by around 9% every year, CBA-mandated raises, step raises and health and retirement packages costing cities and towns millions, as well as PLA laws that drive up costs of every public works project, most towns in Massachusetts will see little benefit from imposing yet another tax on residents.

By the time you factor in salary, benefits and other labor-related costs like workman’s comp and unemployment insurance, this tax would cover ONE employee in Reading.

Now for the kicker. Reading has been returning an average of $500,000 in unspent revenue to the reserve fund for the past 3 years. We’re already collecting more than we spend. We have around $5 million in reserve, nearly 5 times the amount recommended by the Finance Committee. The same unelected committee that brought this tax back after it was defeated by Town Meeting in November. It passed in April.

Some of us decided that the voters should have the final say and got the required number of signatures to force a referendum vote, as allowed by our charter. (Kara Fratto, Candidate for State Rep deserves special credit for spearheading this effort.) An attempt was made to schedule the vote during the week leading up to July 4th, which could suppress turnout with people on vacation. 20% participation is required for the vote to be binding.

Here is my letter to the editors of the 2 local papers:

To The Editor:

There has been much said against those who do not support the local meals tax and our efforts to place the issue before the voters, as our charter allows. Some have even said requiring only 3% (499) of registered voters’ signatures to place the issue before the town is too low and want to change the Charter to make the threshold higher.

Well, Town Meeting voted this tax down last November. Since the petition process to overturn that vote was not an option, an unelected committee of only eight people (instead of the required 499 we needed) was able to bring this tax back before Town Meeting in April.

As many may not be aware, there was a serious challenge to the signature sheets by proponents of the tax in an effort to have some disqualified, thus ending the referendum drive. After review it was determined that the sheets were valid. The Board of Selectmen where then required by Charter to schedule the election. An effort was made to schedule it during the week leading up to July 4th, which could have suppressed voter turn out. (Remember, 20% turn out is required for the vote to be binding, so please vote.)

Also, statements that we have offered no indication of which services we would cut should this tax not go through is a disingenuous argument for the simple reason that we don’t have to cut one single service.

Here are some numbers that you aren’t hearing from supporters of this tax:

1.) Over the past 5 Fiscal Years (not including FY10) we’ve averaged $458,000 in unspent revenue being placed in “Free Cash”. Over the past 3 years (the length of the minimum state-mandated commitment to the meals tax) we’ve averaged just over $500,000/year. (Town Meeting usually appropriates some of this unspent money in November on the recommendation of town management.)

2.) We have around $5 million in reserve currently, nearly five times the amount recommended by the Finance Committee. The same Finance Committee that brought this issue back to Town Meeting after it was voted down last November. (The Reserve Fund, or “Free Cash”, is revenue – your money – collected, but unspent.)

3.) Unspent revenue is about 3x the estimated revenue from this tax. We are already collecting more than we spend and more than this tax will generate.

4.) Even with most departments returning unspent monies to the Reserve Fund at the end of the fiscal year, expense line items remain at previous levels or are increased.

5.) Reading has not cut the budget in at least six years. It has increased or been level-funded. I repeat, it has not been cut. For instance, the Fiscal Year 2011 budget just passed by Town Meeting increased 2.2% over FY10, even though we were told it was going to be level-funded like FY10.

6.) Staff and service reductions have occurred due to contractually-mandated raises and benefits increases.

7.) Benefits for town employees are the second largest budget line item after the schools, at 15.7%, around $11 million.

8.) With salary, benefits and other labor costs (workman’s comp, unemployment insurance, etc.) the revenue from this tax would cover roughly one employee.

9.) Unemployment is at 7% in Reading. Nearly 900 people are out of work.

10.) Property Tax Revenue, FY06: $42 million. Property Tax Revenue, FY10: $52 million.

As you can see, Reading does not have a revenue problem. So there is no need to cut services or tax more revenue out of residents and businesses. There are other ways to raise revenue, such as leasing cell tower space, selling naming rights and advertising at our sports facilities, and sharing services like dispatch and assessments with neighboring towns. There are many more. And not one of them is a tax or fee increase, which is the easy way out. They require some work. But that’s why we elect selectmen and what we pay town management for.

In closing, I’ll leave you with this question to, and answer from, a Town Meeting Member and member of the Finance Committee: Question, “Did you speak to your constituents about the meals tax?” Answer, “I’m not required to.” Well Reading, you’re not required to accept his vote in support of this additional tax either. You can have the last say on the matter when you vote on June 23rd. I encourage you to vote “No”.

Karl Weld

Town Meeting Member, Precinct 7

About TLCWeld

Chairman, Reading Republican Town Committee Constitutional Conservative As a son of NH, I choose to Live Free or Die
  • nomad943

    The current “tax” proposal is just a placemat to get people used to the entirely new concept in taxation. Once people become desensitized to the idea look out; a whole new pot ready for mining by the usual suspects.

  • I have heard a number of times from selectmen that this is what their legislators told them. Now watch for local governments to get powers to raise hotel and meals taxes further, and maybe not need troublesome voter approval. After all, a lot of people spending money on these things are from out of town, so not a problem (in their mind). This is what they want to do, push taxing down to the local level to escape the voters wrath. Local sales tax will be next, and Boston will soon be 10% like Chicago.

    First it’s only 75 cents, then 1.50, and then it’s a big number. Check out my NY car rental receipt from last week.

    1 days @ 56.99             56.99  

    FEE (LaGuardia tax) 11.11%  7.88  

    TAX 19.875%                15.67

    Total Charges              80.54

    I’m sure these started out as a couple percent.

    On a brighter note Verizon is rerouting my land phone line through my FIOS fiber optic cable and somehow this reduces my taxes over $6/month, or $75/year without me noticing any change whatsoever. Cool.

  • Karl Marx

    Cut spending first before you ask the taxpayers for more money.