The Meals Tax and Local Control
So this last Tuesday, the small bump in the local option meals tax passed the City Council and will go into effect July 1.
There are obviously the usual gripes about raising a tax in the middle of a recession, and all of this. That of course ignores the facts about the actual tax increase - .75% will not, as many believe, drive those spending money on restaurants to go elsewhere, in order to save $.35 on their $50 meal. Nor does the entirety of the meals tax increase (from 5 to 7% in total) do much harm either. For one thing, driving somewhere else to save the dollar on that same $50 meal is eaten up with the gas money you’d need to get there.
And there is the fact that a meals tax, at least, is not regressive. If you can afford to eat out, it’s because you have disposable income. Eating out is not a necessity (though I suppose if I had to wrangle three kids and a job, maybe I’d think otherwise!), it is in essence a luxury, and therefore far less regressive than the sales tax or property tax.
Now, I’m as progressive and into income redistribution as the next person - hell, I grew up in a state which abhors it, and poor town in NH had to sue the state for its funding mechanisms, in order to afford giving those kids a decent education - but there needs to be a balance with local control of some funding and budgetary control.
Sure, should the .75% meals tax be made law across the state by the state, and then distributed back to the cities in the form of local aid, Lowell would probably make out well in those formulas, as we do in many others. As a city with many living below the poverty line, we likely (and I’d have to check this) pay less into the state than we get back. Richer communities pay more and get back less. That’s how this state remains as strong and prosperous as we are - we make sure there’s a floor under which a town cannot drop, and that means better economies for all. Imagine if our school system funding reflected the average income of our citizens, say compared to Stoneham?
However, sometimes Massachusetts errs on the side of total state control, and that can be a harm to local municipalities who could find better ways to do things if allowed. The current trend, pushed by Governor Patrick, for a little more leeway for cities and towns, is a good one, and I applaud it. After all, a city or town could opt not to increase the meals tax. And would have to adjust its budget accordingly. A city could opt not to fight the unions for an equivalent but cheaper health benefits package, but then again, they would save a lot of money if they could. Since many of the services we pay for with tax money are delivered on the local level, and we ask for a lot from our municipal government, giving them some headroom on budgetary matters, both saving money and generating revenues, can only help the city do better by its residents.
So of course, as anyone would expect, I applaud the local meals option increase, and I will proudly continue to buy my lunches from downtown establishments. I’m far too lazy (or busy, if you want to be nice) to get around to making my own lunches to save myself $.10 or less a day. 
