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The cost of a meal in Boston will be going up
By adamg on Wed, 07/22/2009 - 2:57pm
The tax on meals, already set to increase to 6.25% next month, will go up to 7% Oct. 1 under a plan released today by Mayor Menino to combat a drop in state aid.
The measure goes to the city council for a vote on July 29.
Under a new state law, communities can add up to a 0.75% tax on the cost of meals - in addition to the 6.25% that goes directly to the state. This means that on Oct. 1, Boston diners would be paying 40% more in tax on a burger than they would today, if the council approves the tax.
Menino also told local restaurant and hotel operators today he will seek to increase the tax on hotel-room rates by 2 percentage points to 14.45%. Combined, the two measures would generate roughly $18 million for the city in the current fiscal year, assuming the increases go into effect on Oct. 1, the mayor said:
None of us like new taxes – we have kept property taxes steady – but as I see it, these local option tax increases would primarily impact visitors to our city, and travel, tourism and convention business remains strong. Even with the proposed increase, Boston's meals and hotel tax rates would remain lower than many other comparable cities like New York, Washington D.C., San Francisco, and Chicago.
Figures released by the mayor's office showed meals taxes ranging from 8.38% in New York to 10.25% in Chicago.
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Comments
Local Option
When I first started hearing about the increase in meals taxes and giving cities and towns the 'option' of raising the tax an extra 2 cents, I knew Mayor Mennino would leap at the opportunity.
Another example of an unending appetite (pun intended) for our money. I know all the talk about that it's just a small increase etc. I'll just say this, I'm making do with less, as are many others. I don't have an 'option' to raise levies on anyone or anything. Our local and state governments should do the same.
Thank god i'm leaving....
Thank god i'm leaving....
Amen
.
I keep trying to figure this out
I keep hearing folks here talk about how they're leaving and going somewhere real soon. It must be a lot of folks. Where are they going again? I'm trying to narrow it down. Let's see... it's got to be a state that's not as hard hit by the recession, and with lower taxes...
Rhode IslandNew YorkNew JerseyMichiganFloridaNevadaCaliforniaArizonaOhioHawaiiOregonN or S CarolinaPennsylvania...Man, this list goes on and on!
Wait, I've got it! You're all going to Texas!
Okay, I feel better. You can have Texas.
I am thrilled to pay a little more to live in Boston instead.
Sorry Sock, But this die
Sorry Sock,
But this die hard progressive thinks we need to take a hard and serious look at cuts in entitlements and expenditures, before we raise taxes; especially in a recessionary period.
there's a lot of social safety nets, and good programs out there that should continue to get funding, but raising taxes with the obvious waste we have going toward cushy pensions, union contracts, the MBTA, ect needs to stop.
Higher Education has always been on the back burner, and serious cut; yet out tax dollars have paid for someone to retire @ 80% w/ 22 yrs of service with the MBTA, and still get another state paid job. And now Education will get more cuts, and taxes are being raised?
Sorry, but that's unacceptable.
We need to prioritize, cut the BS, and raise taxes as a last resort. And no one is going to be happy after taking this hard look.
Not to worry!
I'm not worried or bothered by this, at all.
The Mayor is on record as saying that, if he was given the option to raise the city's meals and sales tax, property taxes in the city would go down on average $200 per year!
Mr Mayor, when should I come by City Hall for my check?
Good thing over half of this city rents...
I want a check too. I don't pay property taxes and I sure as hell know my landlord isn't going to drop my rent just because his property taxes went down at all. Yet, I eat at these restaurants as much as the tourists!
I'd also like to know if this "increase in revenue" is based on current diner/hotel patron levels or on the expected DECLINE in levels if they jack up the costs/rates more in an economic downturn. People are going to stay outside of town, eat outside of Boston, and generally avoid the city if it keeps getting more expensive in taxes to visit.
I really hope this story builds some steam, because this is getting out of hand.
Safe bets
It's a safe bet that the half of the city who owns votes at a significantly higher rate than the half of the city who rents.
You are half right
Those who own tend to vote - but only about a third of Boston owns their home (or at least only 75,000 of 250,000 take the residential exemption - probably a few second homes in there - they don't vote either if they aren't residents)
Yeah, there's a theory about
Yeah, there's a theory about higher taxes reducing behavior, but this increase doesn't remotely bring us to the right hand side of the Laffer curve. Think about it. If you spend $100 on a meal, you are adding a whopping 75 cents to the bill. Is somebody really going to forgo their night on the town for 75 cents? The idea that this is going to modify behavior is fairly ridiculous.
He's got some pair on him
I LOVE this line:
None of us like new taxes – we have kept property taxes steady ...
Only in politics could you try to get away with something like this.
Yes, Mr Mayor, the tax RATE has stayed steady. People's property taxes have by no means stayed steady in the city of Boston during the years of your reign. The assessed value of my property has gone up, so have my taxes. Do you need me to send you the proof?
100%
Residential property taxes in 1999 were $247 million. In 2009 they are $507 million. We've built 4000 new units of housing - so take of $4k per unit and we get back to about $491 million on the existing housing stock - result - property taxes are up 100% in 10 years. This year is not shaping up to be any picnic either - here are the numbers. My best estimate is that we will see about a 5-10% decline in residential assessments and that the percentage decline in commercial assessments will be about double the residential decline - result is 10-15% increase in residential taxes citywide (less in areas hard hit by foreclosures, more in stable neighborhoods like downtown, Southie and C-town - magnified a few percent if you get a residential exemption). With residential stabilizing in 2009 and commercial continuing to struggle expect another 11% or so for FY 2011. Meals tax is not a bad idea - if and only if you use it to offset the property taxes and thus truly diversify, not expand, your revenue stream - which of course they are not doing. This is incremental revenue because a 1.5% increase in the city's 2010 budget is not enough to cover the mayor's promises. Hold on to your hats boys and girls - it's about to get very bumpy.
If I was in charge
If I was in charge I'd reduce the residential exemption by 25 - 50%, at least for one year. Chances of this happening are ... well, nil.
Let me tell you, my suggestion did not go well at the dinner table, last night.
If you were in charge, you'd
If you were in charge, you'd be voted out. Most voters are the folks who get that exemption. Any Mayor who tries to get rid of it commits political suicide. At any rate, there is a rationale for the exemption, and I think it's a pretty good one. Owner occupied buildings are better maintained. Better maintained buildings lead to a healthier neighborhood.
And as somebody else has already pointed out, it's a pretty minuscule increase. To be honest, I can't stand the quarter cent part, so a part of me likes the rounding up. And don't jump to conclusions, I can handle the math. I just don't like the hidden tax when the register rounds it up.
Only if it encourages homeownership
As we've discussed ad infinitum before, residential exemption discourages homeownership because the typical buyer just capitalizes the annual discount and puts it toward a bigger mortgage (eg - if you get $100 a month in tax discount - the typical person just adds that on to what they can afford in monthly mortgage payments and uses that to bid up the price of a comparable home - if you don't the next person does and you don't get the house so next time around you just bid higher). The lower the value of the home, the larger the percentage increase in the purchase price - again one more way we drive up the cost of housing in the city (oh yeah - and then we take the discount we give to the homeowners and put it on the landlords who pass it on to their tenants which drives up the cost of renting too).
Aren't politicians brilliant? they've got everyone believing this myth. Great marketing - lousy policy.
You can't blame that on
You can't blame that on politicians. When you give people a tax break, some will certainly abuse it, but that is not universally true. And even if every single person claiming the exemption is doing exactly as you suggest, the end result is the same -- a greater percentage of resident owners.
As a city resident I think
As a city resident I think this is a great move. Getting money from those who wander in at night and then shuffle back to the 'burbs is perfect. The increase will not sway anyone from not dinning out and keeps more money inside the city.
Wannabet?
Wannabet?
You think the .75 percent
You think the .75 percent will stop anyone from visiting Boston to eat? That is less then the share of the increase that the Governor wants for the State. Also be on the look out for other communities making the jump, I know Brookline has a meeting coming up on it soon.
This new tax will deter no
This new tax will deter no one from going out to eat. It's too miniscule to matter.
Whipped cream
No - not the .75% alone - it's the 5% plus the 1.25% plus the .75% plus the property tax increases plus the T fare increases plus whatever else they feel like throwing at us (and we haven't even begun to see what Washington is coming up with). The 0.75% is just the whipped cream on S*&t as my golf friends say when they make a nice long putt for a triple bogey.
Sure. Dinner?
Sure.
Dinner?
Winner...
pays the 0.75%!
I dont get it. If its
I dont get it.
If its already going from 5-6.25%, why does Boston need it even higher?
Cant the .75% more wait for the future when we need to raise taxes again?
Isnt the upcoming increase bad enough?
Well, CA and NYC have been
Well, CA and NYC have been higher than that for years, they both still are. People are complaining, but they will still eat out, just like they will still drive their cars at $4.70 a gallon for gas.
Wake up, people really don't care - they will piss and moan but do nothing. Hey didn't people protest the war in Iraq in 2003 and we're still there? SHOCKING THAT PEOPLE WHINING DOES NOTHING! I'm sorry for the poor people, but hey, at least McDonalds is pretty cheap. Maybe you should ask your friend Obama for help.
You can always move to New Hamster. I hear they have an AppleBees with a singing waitress; that passes for culture, right?
In this life, you are either the lamb, or the knife.
Sort of a different tax
The 1.25% increase goes entirely to the state. The 0.75% increase goes entirely to the city.
Somebody correct me if I'm wrong (Stevil?), but Boston is somewhat unusual among large cities in the percentage of its revenue that comes from the property tax - because it's somewhat unusual in that it doesn't have the authority to levy its own taxes beyond the property tax (and a hotel-room tax). New York City not only has its own sales tax, it has its own income tax.
You are correct
We get over 60% of our income now from property tax - I think the next closest is about 40% (don't know which city) and the typical is 30/35%. Most other cities do have some kind of dedicated taxes - sales, income etc. Boston does get about 20% of its income from various fees, fines, interest etc. The rest (about 17% now I believe) comes from the state - that used to be over 25%. I know I harp on the city a lot but does anybody know what the heck the state is spending all our money on? (about 40-50% goes to health care I believe).
Good idea, sort of...
I momentarily thought that this was an okay idea, until I realized that the small increase in the meal tax will likely translate to less tips for our city's waitresses and waiters.
As if we weren't already struggling. . . .
Stop crying
You who are weeping about a $40 dinner going up by 80 cents, how many keystrokes did you waste when the grocery store raised the price of milk a buck or so? Or when your health insurance climbed $5 a paycheck? Or when the price of gas went up $5-10 a tank this spring? Speaking of gas, the 19 cent gas tax made the legislature hold its breath until it turned blue, but look at what happened to the price of gas anyway, and everybody is still managing to fill their tanks. The gas tax would have been the right solution - encouraging smarter behavior, and splitting the profits with Big Oil (Don't believe me? Gas prices in PA are about the same as here, and PA taxes are 10 cents/gallon higher in MA.)
I just looked up my Boston property taxes (on the same house) from 1998. They're a whopping 2% higher in 2008. Unlike my suburban neighbors, I get my trash picked up, my sidewalks and street fixed, and a fire and police station within a mile or two. Boston isn't a perfect place to live, but it's not bad at all.
You have somehow escaped the wrath
It's not the 80 cents - it's the thousands that it all collectively adds up to.
My taxes are up about 60% since 1998 (about 300% since 1997 which is why I got so involved in this issue). There goes the IRA.
I agree the gas tax would have been a good solution (and I do drive some) - unfortunately the gas guzzling suburbanites got their way again.
Our 7 unit condo is essentially a single family home. We collectively pay about $35,000 to the city in taxes on 25 feet of frontage. The hood's not terrible - but for that kind of dough we should have world class schools (we don't have a school - the mayor told us personally we don't deserve one), perfectly paved streets, no rats eating my car etc. etc. Why should we settle for less value just because we live in the city?
Be careful - remember first they came for everyone else and you said nothing. When they come for you there may be nobody left to speak on your behalf. This is happening and if you haven't gotten hit - count your blessings. You will eventually if the city doesn't act - it's built into the system. Spoke to two long term residents today that sold their expensive downtown condos because they couldn't afford to stay here anymore and I know at least a half dozen planning to do the same as they move toward retirement - if prices start to fall downtown due to reduced demand the taxes still have to get paid - guess who makes up the difference? Maybe 10 years from now my taxes will only be up by 2% - but that means yours will probably have tripled.
Do you live in Allston,
Do you live in Allston, Malden, or Slumerville? If so, you've made your own bed.
Don't act like paying taxes is the holocaust. Welcme to democracy 101. Either get a better job, or start dumping tea in the harbor.
Back Bay
Yes - in the "ritzy" part of town the rats eat your car - when they are not having a litter of babies on your engine block (heard about TWO of those this winter).
Taxes are one thing - but when they increase 7% a year and then they want MORE - you have to start wondering where it's all going.
PS - I prefer coffee to tea - DD all the way.
Good question ...
So, what do our 15 city councilor candidates think about this? Who wants to ask?
Sean Ryan...
is 100% opposed.
They will all say up and
They will all say up and down NO
Then whoever gets elected will vote for it anyway.
This governing thing is much easier as a candidate then as an elected official.