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February 24, 2010

CC Finance Sub-Committee Meeting 2.23.10

by at 10:27 pm.

I was a bit perplexed by last night’s Finance Sub-Committee (CC R. Elliott (Chair); K. Broderick and J. Mendonca) meeting . The Sun had an article about this meeting agenda focusing solely on the “meal tax.” I did not remember who and when the motion was made to discuss this issue at the Sub-Committee meeting. Apparently, the whole thing was triggered by a letter from the town City of Methuen asking Lowell what their plans are on this issue.

Most of the 1-hour or so meeting did focus on an update on the FY 2010 Budget. (Here is the link to the bliptv/LTC broadcast). Both CM Bernie Lynch and CFO Tom Moses provided the CC with an update and answered questions. If I am not mistaken, it appears that things are o.k. for this year.

Then Chair Rodney Elliott raised the issue of the potential local meals’ tax. Currently, the State charges 6.25% meal tax and has given cities/towns the option to add on an additional 0.75%. That is $0.75 for every $100 you spent. This is when the discussion got interesting. First of all, CM Lynch reiterated that at “this time he does not have a proposal, still not sure what he will do; they are working through the budget.” CC Elliott is correct in asking that this issue be vetted out before the budget is presented as it was last year. But as the CM stated last year, there was a lot of uncertainty about local aid and the administration had to make some assumptions in its budget. I think this but issue should be discussed during budget season along with all the other budget issues and probably during a full Council meeting.

I have stated in the past that I favor the City Council passing this local option; if it means maintaining a certain level of service, why not?

Did you ever wonder why those who are quick to tell us that Lowellians are running to New Hampshire to buy their alcohol because of high taxes here do not present the counter argument that New Hampshirites rush to Massachusetts to eat because the meal tax in the Granite State is 9% and here in Massachusetts, it is no more than 7%.

Back to the meeting, CC Elliott and CM Lynch had an interesting exchange. Here is a clip:

It is pretty simple, your revenues have to match your expenses. Either you increase your revenue or you decrease your expenses. It is not complicated. And as far as the politics of budget decisions… please. Didn’t CC Elliott take part in a budget decision last year that reeked of politics? It would be nice to think that all budget decisions made by the CM and the CCs are based solely on good governance and not politics; but no one is that naïve.

I think that CM Lynch is right when he stated this morning, during his regular Wednesday morning segment on WCAP, that last year there was not the political will in the CC to adopt the local meal tax. And I am not sure if there is the will or desire this year either. My guess is no but this City Council better come up with some creative way to pay for the health benefits, sick day buy- outs and pensions that were approved by previous CCs without a drastic cut in services.

8 Responses to “CC Finance Sub-Committee Meeting 2.23.10”

  1. Greg Page Says:

    …And of course the bigger challenge is how to dig us out of the hole created by the problems you cite in the last sentence. That hole is only going to get worse over time, and it makes the entire question of a .75% meals tax look meaningless by comparison.

  2. Prince Charming Says:

    That small increase will not discourage diners from eating at their favorite spots. If the food is good, I’ll still go. Stop whining guys and start cooking.

  3. Kami Says:

    I recall watching a city council meeting where the Methuen request was discussed as it was part of the council package. CC Elliott asked the council to refer the request regarding meals tax to the finance subcommittee. The council voted in favor of this. That’s how I recall it got there. I would assume (but do not know) that the subcommittee meeting was held to discuss all items referred to it by the council. Just because the paper focused on one issue doesn’t restrict the committee from performing all of its duties.

    Honestly, enough with the taxes already. The state meals tax was increased from 5% to 6.25%, sales tax was added to alcohol at 6.25% (completely new) etc, etc. I have avoided Target in Lowell at times because I don’t want to pay 6.25% on a large item. I go to Nashua Target instead. Now the Governor is proposing more taxes on soda and the like that contain sugar. When is enough enough? Is there ever a tax you don’t agree with?

    I personally knew the meals tax in NH was higher but I don’t think a lot of people realize that. Regardless, do we have to have higher taxes than NH on everything?

    It is better to get this out in the open now and have the will of the legislative body known BEFORE the budget is developed with a tax the Council is not willing to support. Or maybe they are willing to support it. I don’t know.

    Lynch didn’t “have a proposal” last year either but included it in the budget. Highly political move on his part. He never, to my recollection, brought an actual vote before the Council on this issue. So what is to preclude him from doing the exact same thing this year that he did last year? The only thing to preclude him is for the legislative body to go on record either for or against the tax and move on.

    People complained last year because they voted on a budget that included a tax they hadn’t approved and that was considered political. Now the complaint is they’re asking about it before the budget is put together and maybe they shouldn’t be asking? Seriously? You can’t have it both ways.

  4. Huh Says:

    Kami,

    If you watch the clip the CM explains that last year there wasn’t a law for the Council to adopt when the budget was voted but its pretty clear that he did “have a proposal” that was included in a budget that WAS voted by the Council. Of course then they all got cold feet and started backing away. Lynch probably saw the handwriting on the wall and made other plans, which probably weren’t the wisest if they perpetuated the sense that the City doesn’t need resources in order to provide essential services.

    I can see what cuts have done to so many services. Put me with PC. I can certainly afford a few pennies when I go out to eat if it helps the City stay financially strong.

  5. Lynne Says:

    Come on people…’sales tax was added to alcohol at 6.25% (completely new)’…’Now the Governor is proposing more taxes on soda and the like that contain sugar.’

    There never SHOULD have been an exemption on either alcohol or sugary crap in the first place. Why it’s there is a mystery to me (is there a sugar lobby in MA?). Tax them both. For one thing, we could use a little more adverse incentive to stop drinking sugary and chemical-laden sodas.

    In this country, “eating cheap” means eating crap. That’s all the processed-to-death foods. Much of this is because of poorly done federal subsidies to certain foods - in particular, corn, made into high fructose corn syrup and cheap enough to put into EVERYthing. (Soybeans come second, though corn is huge. And guess what? Soy is NOT a health food!!!) Farm subsidies were intended to help family farms not die out in a bad year due to drought, or the opposite too much of a bumper crop, dropping prices precipitously. Of course that’s not how it works these days, with most subsidies going to large factory farms.

    So to tell the state government to keep the exemption on the stupid sugary sodas and the like is basically to say, we can’t recoup our costs to society of that taxpayer-funded corn subsidy, just let the people eat crappy cheaply. Yeesh. Talk about reverse-incentives.

    6.25% tax on consumption is NOTHING. We were probably undertaxing. Try going to NY. (New York lets their cities charge a much larger local sales tax, BTW.) Or try buying real estate in NH - you’ll see some taxes all right. Or better yet - go to Europe or Canada sometime. .’Course, they also have way better services than we do, because they pay for them. You know, like free and universal health care…

    RE last year’s line item of potential meals tax revenues, Lynch didn’t do it for any political reason I can discern. It was more like, here’s all your options, folks, and here’s what we predict the city can do with it. The Council did NOT have to pass the budget with that line item in the mix, just like they “cut” the Manager’s portion eeeeeexactly the amount by which his Assistant earned. So lay it on the Councilors who didn’t want to face the unions saying, hey, we forwent that revenue potential so now there will have to be more cuts.

    You either pay for it, or you don’t. It’s a binary choice. Just because the politics around it sucks doesn’t mean it ain’t the truth.

  6. Kami Says:

    If there wasn’t a law in place at the time why would the Manager even include it in his budget? You never include a revenue stream you’re not sure of in your proposal. You don’t do it in your home budget and you don’t do it in a municipal budget. Very very simple.

    He shouldn’t have included it and the council shouldn’t have approved it. I don’t buy that crap about there wasn’t a mechanism at the time. Bernie’s a very good Manager, but he’s not without faults. You’re all completely mesmerized by him.

    Sure, Canada has free universal health care but you can’t access it. If you need it quickly you cross the border into the USA and put it on your mastercard. I’ve heard stories from a number of Canadians about this. I don’t want to wait a year for an MRI.

    Who are you or anyone else to dictate what I can and cannot eat? Massachusetts doesn’t have a tax on unprepared food or soft drinks so why single out this group? Because you and the Governor want to babysit and control all of us and decide what’s bad for people. Last time I checked this was a free society and people were free to make choices. But if you and your ilk get your way there will be less and less of that for the rest of us.

  7. Greg Page Says:

    Lynne — just to clarify on the cheap = crap, are you talking about fast food v. prepared food, or about what’s cheaper once someone is in the supermarket?

    I ask because I’m noticing the metabolism slowing down a bit and trying to change a few habits…and I’m saving a lot more money by cutting back on fast food and even on processed foods inside the supermarket. Staples like oatmeal, bananas, rice, bread, eggs, etc. are cheap, whereas three meals out a day (even at BK or Mickey D’s could easily cost me north of $25 a day..times 7 days a week..times 4 weeks a month..you get the idea). If I had two or three kids, I would literally not be able to afford McDonald’s on a regular basis unless I changed tax brackets. Ditto for the highly-processed, high-sodium ready to go meals you can buy on a supermarket shelf.

    I definitely see your point about high fructose corn syrup and see the irony when we subsidize the hell out of it, and then have to deal with the health ramifications it causes. But as far as the obesity-poverty link, I’m not sure where the causation-correlation line begins and ends…I know people always point to fast food chains as a culprit, but for one person with a mortgage, I see fast food as more likely to drive me into poverty than to result from it..

  8. Lynne Says:

    “Sure, Canada has free universal health care but you can’t access it.”

    I call bullshit! Do you actually have more than someone else’s talking points to say? I have a load of friends in Canada and they do juuuuust fine with their health care, and they access it just fine. For every anecdote you spout I can respond in kind with the opposite. Give me a break.

    “Who are you or anyone else to dictate what I can and cannot eat?”

    Honey, we already do. It’s called economic incentive and it’s running the wrong way (as in, making crappy high cal food cheap with subsidies, and NOT subsidizing healthy foods like fruits and veggies). NO ONE is saying you shouldn’t buy crappy food. But putting the economic incentive to buy crappy when you’re poor is bad policy, because guess what happens? The fact that the poorest (as well as the rest of us) tend to buy the subsidized crappy prepared food is hurting YOU by the way, in the form of higher costs in health care and such. NOTHING is not connected and if you think general policies in food or any other area isn’t affecting you, you have your head in the sand (also known as being Republican).

    One problem for many folks, Greg, is time. If you are working a lot, as many people are to make ends meet (particularly in marginal jobs) the time consuming healthy stuff takes too much time. So if you are pressed for time, where are you getting your lunch? People on marginal incomes are not going to Life Alive for lunch, but to fast food joints.

    But as to what I was referring to, it was basically the middle food aisles in the supermarket, the prepared foods. Same reasoning - people who have five minutes to prepare dinner are not cooking from raw ingredients. Also, veggies and fruits go bad, wasting money, and so for marginal incomes I would think that would be less attractive (I know I do Meant to say, I know even on less than a marginal income it is less attractive for me).

    RE correlation there is a chart somewhere out there that shows consumption of corn syrup and obesity over the decades, and they track exactly together. But the main thing is obviously calories - and since HFCS is extremely cheap, it likely means that calories that would otherwise not be put into processed foods, gets put there, and therefore is one of the likely causes.

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