Saturday, May 5, 2012

Chamber and restaurant owners against hike in meals tax

The Sandwich Chamber of Commerce has gone on the record opposing Article 12 of the warrant to be debated at next Monday's (May 7, 2012) annual town meeting. In an email sent yesterday, the chamber states its case:

The Sandwich Chamber has taken an official position opposing Article 12 - Allowing the town to charge a local meals tax in addition to the existing state tax on restaurant meals. The Chamber continues to oppose this tax as a unfair burden, singling out one sector. The Sandwich Chamber opposes any increased taxes further burdening one industry as an unfair tax.

In another email circulated by a local restaurant owner, a laundry list of reasons to vote against Article 12 is presented. See that appeal here.

Proponents argue that 75 cents on a $100 bill is insignificant and the $250,000 or so that the tax is estimated to add to town coffers is needed to pay for important services and to close the ever present budget deficit.

Are you for or against adding three-quarters of a percent to our meals tax, bringing the tax to 7% versus the current 6.25%? Vote in the poll at the right and add your comments below.

To vote for real, show up to town meeting on Monday. There is no vote at the polls on this issue; it will be decided at town meeting.

29 comments:

  1. always watchingMay 5, 2012 at 1:20 PM

    I have a lot of concerns if this passes. Yes, the town needs revenue, but not once again at the tax payers expense. In this economy we have to see what can be done to increase spending to businesses, this will deter that. If you think people won't go to another town for their night out, if they're able to do so, you are in the top 1%. Look at the outcry from people when the schools had little choice but to impose fees (tax) on the parents. Now the town wants to effect the entire town again. Some people are on such tight budgets that a certain amount of money is put aside for dining out. The added tax will be taken out of the pocket of the server. I'd rather another solution was found to pay for the bubbler at town hall.

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  2. If you don't want to pay 75 extra cents on a $100 check you don't have to eat out. It is a discretionary tax. The statistics show that in the other 11 Cape towns who have passed this, there has been no decrease to business at all. Obviously there has been benefit to the towns through the revenues given directly to the town. For Sandwich that could be an additional $200,000 a year. Two selectman candidates are in favor of this, Jim and Tim. It is a way to help even create the possibility of taxes not going up. The services the additional revenue pays for are dollars not needed from the tax payer through property taxes. No new taxes has a nice ring to it, but if used to inhibit rational incremental increases in discretionary spending taxes, we are shooting ourselves in the foot. Look at the taxes lost through internet sales to our local businesses because there has been no remedy through legislation. It would be good of the Chambers to champion that with the same level of vigor. When this first came up the stats weren't in about the impact on local business or the absolute revenue to towns. Now they are. This is a no brainer.

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    1. Anonymous, you bring up some interesting points.

      1) Let's say that a number of people are opposed to the additional meals tax and decide not to go out to eat, as you suggest, or decide to go to a town with no local option meals tax. Do Sandwich restaurants lose 75 cents on a $100 bill? No, they lose $100.

      2) Who actually pays for this incremental tax? Mary and I go to Marshland for breakfast once in awhile and usually end up with a check for $16, maybe $16.50. I put a $20 bill on the counter to pay for the check and tip. After we add the local option meals tax, I'll still put a $20 bill on the counter. After all, you would argue that the tax is only 12 cents on a $16.50 tab. Who just lost that 12 cents? The restaurant? No. The wait person just lost that money. The people working in the restaurant who can least afford to take a pay cut lose that money. In the same way that ONLY 0.75% aggregates to $250K for the town in a year, that 12 cents lost over and over and over by all the wait staff employees at all of our restaurants for 365 days a year aggregates to a lot of money too.

      3) Using this end around instead of asking voters to support additional spending by the town in the form of an override is wrong. If adopting the local option meals tax required a vote at the polls, I'd be fine with that. If the selectmen put an article on the town meeting warrant for an override of $250,000, we would have to pass the article at town meeting AND vote to enact it at the polls. The way the state legislature set this up, only a vote at town meeting is required to pass this tax,

      4) You didn't mention this, but we're selectively tacking on this extra tax only in one sector of our local economy. Is that fair?

      5) Finally, you make the argument that a tax-free sale via an Internet merchant puts our main street, bricks and mortar businesses at a disadvantage. Isn't that arguing that higher taxes on certain businesses is bad for business? Thank you for making my point.

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    2. What is discretionary about taking clients to dinner. If you know anything about business, you know it must be done to get contracts.

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  3. We have to use the tools we have to bring more revenue to the town to start fixing the things that we can't afford to fix and send the message to the rest of the world that we are proactive not reactive. All very good arguments Randy, but as you know local options are just that for a reason. Town by town has decided to take advantage of it. Your argument is philosophical not pragmatic. The same people worried about their client dinners are likely the same people who complain the town is raising taxes and not doing enough. It is a start. 11 other Towns are benefiting. Is Sandwich once again going to loose out on steady revenue because of misguided political thinking. I hope not.

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  4. Just an FYI to Anonymous 7:14: The Sandwich Chamber runs a vigorous campaign to champion the idea of thinking of and choosing to shop locally first. If you follow this link you can read about it. It is all over-in the papers, on TV and on social media sites. http://www.sandwichchamber.com/SandwichChamberShopSandwichFirst.htm
    The Sandwichfest, which will be held on June 30th, is an enormous effort to support local businesses. I believe in giving credit where credit is do-hope to see you there on June 30th~~

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  5. OK suppose the numbers are correct and the town will get $200,000 to add to its $65 million dollar budget. That money has to come from somewhere. Unfortunately, as Mr. Hunt points out it will not come by "taxing the rich". It will come from waitresses and bartenders who are mostly working second jobs to make ends meet. For these citizens, the cost of maintaining a household in Sandwich is already the highest on the Cape. Which is another reason why you cannot honestly compare Sandwich to the other 11 towns on the Cape that have instituted this tax increase.
    Come to town meeting tonight and vote NO on this tax increase.

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  6. I understand the Chambers view but disagree with it given the slightness of the increase in the local option tax and the need to find alternative revenue to property taxes. I know the Chamber sent out to their membership notice of what to vote no to at Town Meeting. Of course they have the right to do that, but I hope some of the local restaurant owners think about the benefit to the town if they show up at town meeting. I didn't see any restaurant owners or Chamber people come to the BOS meeting when again. Did the Chamber take a vote of all their membership or was this just a board decision? Sandwich residents are going to other towns and paying this increase and not thinking a thing about it. The filter of sales tax dollars to the state and back gives our money to other entities. This money comes right back to the town when we use the local option.

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  7. In the 11 other towns the local option tax exists, there has been no decrease in tips D. Dexter. That is a myth. We now have hard facts about how this tax has been working for other Cape Towns. Roads, sidewalks, unpainted buildings, and other things that go undone because the town struggles to make ends meet have more a negative effect on the economy you speak of, in my view. Not to mention the people you talk about would rather continue to have their taxes go up? This money helps with tax increase relief. Come to town meeting and vote yes to the local option meals tax of 75 cents increase for a $100 bill. It is an optional tax and a tool to help our town go forward.

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    1. Anonymous, I'm guessing that you have no information supporting your claim that there has been no decrease in tips. How would one go about gathering data for this statistic? The fact that taxable meals income has not gone down, assuming that that is the case, has no bearing on whether tip income has gone down. Show me a link to the study that concludes that tip income has not fallen.

      Another point that you completely miss the mark on, Anonymous, is your supposition that without the local option meals tax our property taxes will go up. No they won't. Not beyond the 2.5% per year allowed by law. For that to happen, there must be an override that passes both town meeting and at the polls.

      One thing is for certain: No matter how much money we give to a government (local, county, state or federal), the people governing will find a way to spend it.

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  8. Posters are entitled to their own feelings, but not their own facts. Why is it that The Town always needs new revenue to make ends meet? There are some interesting facts behind the answer(s) to that question. I think that's where these debates should focus as much as they do on squeezing ever more capital out of its constrained and beleaguered citizens.

    Maybe if we all thought about this equation in economic terms, instead of hyperbole. Economics is the study of the allocation of scarce resources which have alternative uses. (My time spent here cannot be used to work on client matters, at the moment). Economic theory applies equally to the consumers of tax revenue as it does to the producers of tax revenue.

    As a producer, I only dine in Hyannis for business purposes (the extra meals tax there is a tax deduction, at least 1/2 of it).

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  9. Further: if every Cape Town assessed the tax, then there'd be a level playing field for tourism (insofar as tourists already deciding to make the Cape their destination). As it stands, this is a local choice, not a mandate. I BELIEVE (but cannot prove) that there will always be at least one Town to capitalize on the "no-new-meals-tax" perception as a competitive advantage.

    It might as well be The Town of Sandwich, Massachusetts. Time for lunch … now, where should I eat today?

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  10. I think the point being made is if we ignore revenue such as the money that would come directly to the town, we are not helping out the taxpayers who have to pay for everything. It is a step in helping with tax relief since it would provide dollars apart from taxpayer property taxes needed to run the town. There is no way to provide services without money Randy.

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  11. Wouldn't it be a tax deduction in Sandwich too Nick? There are 11 towns who have taken the option. I doubt seriously if advertising that there is no .75% tax would entice people to drive to Sandwich to dine. I think we would look rather foolish, especially when they get a load of our roads, etc. We have a tourist economy with a very short season and the lowest number of second homes on the Cape. Really??? we couldn't use a little help? Beleaguered citizens need services too.

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  12. I will be voting in favor of the meals tax. Sandwich needs the revenue and I think this is a reasonable way to bring a little more money into town. The .75% increase in meals tax is such a small increase to the price of a meal at a restaurant and I'm sure nobody is avoiding the fine restaurants in Barnstable and the other 10 towns on Cape Cod just because they have chosen to charge the local tax. Randy suggested that it will reduce tips, but I'm not sure what he bases this assumption on. Is there research in Barnstable that indicates that this has been a result of the implementation of the meals tax? I certainly would still tip waitstaff appropriately and not deduct the extra tax from their tip!

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  13. You who vote for the increased meals tax should think about your vote when the money raised is not enough and has to be raised yet again. Look at your verizon, comcast, wireless bills and see how the consumer is being raped by government. I would rather not see the increased money from the tax go to raise wages.

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  14. Anonymous, wouldn't it be easier to help people by letting them keep as much of their own money as possible? Instead of taking more of it away from them in the form of taxes? Also, having many friends in the restaurant industry throughout the cape, I can assure you that they've suffered the most when a meals tax has been Implemented. Instead of looking at some flawed statistic, why not go talk to a waitress or bartender. They are the ones that it will hurt the most.

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  15. I give lots and lots of money to the wait staff in Sandwich and have never failed to over tip. I was wait staff once upon a time and remember. But the tax would not have inhibited tips in my opinion because the tips are based on what the total cost is. For the 50% of people who buy meals in town as part of vacation they are not going to pay attention. They are going to pay the bill and add a tip. It was disappointing last night to watch town meeting and see how stacked the deck was for voting down the meals tax but it is what it is. The need for increased revenue to the town will not go away. To the candidate Sean I would ask, how would you propose to raise some more revenue for the town in a timely manner. Economic Development aside, we have needs now.

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  16. Maybe I'm confused about the numbers, but it didn't seem to me like the budget was lacking revenue. If the town so desperately needs the estimated $280K that the local option meals tax would bring in, then explain to me why:

    1) There is a budget surplus for FY2013 of $215K.

    2) We stashed $175K into the rainy day fund.

    3) We upped the capital budget by $200K over last year's budget.

    4) We upped the reserve fund by $100K over last year's budget.

    That's a total of $690K that was theoretically available for the FY2013 budget. And it's the end of the world that the local option meals tax did not pass?

    What am I missing here?

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    1. Great question. Given the facts that you stated above, I also have to ask why the Board of Selectmen and Finance Committee felt we could not afford to provide additional funds to the schools. A 1.37% increase is far from level service and will require additional fees. Funny how we don't bat an eye at how much is spent per student at Upper Cape Tech or Sturgis, but we feel the need to clamp down on our local schools. Then, we all complain about how much we spend in charter and school choice sending tuition. Doesn't make any sense to me at all.

      As far as the meals tax goes, it certainly would have come in handy when we aren't so fortunate with our revenue numbers. This will likely be the case in the next year or so.

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    2. You're missing being rational about the future, given the fact that costs go up and up and up. You're missing the town has a huge amount of making up to do to repair all that has been neglected in the past 20 years. You're missing there are waste water issues coming down the pike. Extra revenue starting in July would help to keep the need for an operational override at bay another year or longer.

      Planning for the future is a good thing. Being proactive is a good thing. A selectman once told me that the town budget is like a check book, you can only spend what you have in it. Bit simplistic for my taste since that says nothing about the responsibility those in town government have towards taking care of the people of this town through the town services it provides. But even in that simplistic explanation, why would it not be better to plan for spending that we know will come.

      This budget is based on figures that will change slightly when the state budget is settled. We already know that out of school sending is more then we budgeted for. It is wise to plan for future spending. We can use every penny we can get. And given the fact we are a tourist economy this made sense. It still makes sense.

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  17. You aren't missing anything! With all this "extra cash" why is it that the BOS and FC couldn't see a way to give the schools $140,000 to even out their budget so that fees wouldn't have to implemented. I don't get it . The town knew that the schools were following the town by doing a 0 - 0 - COLA - just like they did - and they knew this was the districts year to implement the COLA. They give 1.3% and the town 3+ - WHAT??? How can the schools negotiate in good faith? You keep hearing about decreased enrollment, but what people need to understand is that it is spread out throughout 12 grades. Therefore you can't eliminate a teacher when she only has one less child in her class than last year. If they all came out of one grade it would be a no-brainer. But that's not how it works. And... Oh my God, costs keep going up.. go figure.. no wonder the budget can't go down. Reality really stinks. But it is what it is. Let's hope that somehow the schools can find a way not to implement fees. But without the help of the BOS and FC.. doubt it.

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    1. It was a political move plain and simple, it made no sense and it never will. It makes no sense on the BOS side especially now since what the one selectman wanted (parents to come to town meeting and ask for more money) didn't happen. Why would parents come to town meeting in a town that couldn't even give a little more to the schools to help avoid additional fees. Loved the young man who spoke up and said fees would drive more kids from the district. He was right and no one seems to be able to really see that. All the back room deals in the world aren't going to help this town. We just aren't making the right decisions. The political scales are weighted on the wrong side. And the people on the three major committees really don't seem to know what they are doing. That's been going on for some time. What the heck do those who are getting a pay check care if the politicians keep screwing up? They still get paid. Sad that no one really seems to care about the people of the town as a whole.

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  18. Randy, the Town doesn't explain why they need the money because taxpayers don't demand an explanation. A pathetic grand total of 417 voters attended Town Meeting with the majority just rubber stamping the Warrant Articles.

    Taxpayers agonized over the local meal tax which amounts to .75 on a $100 tab but votes to fund the golf course at close to $1,000,000 dollars without asking ONE question about closing the revenue and expense gap?

    If we're going to "Grant" the SEIC $50,000 they should use the money to develop a plan to make the golf course self supporting. If $50,000 and the SEIC can't bring the golf course into the black, I suggest we sell it for a solar energy farm.

    If the transfer station can be "pay as you throw" why can't the golf course be "pay as you putt"?

    I'd like to know how South Sandwich Village cast a spell over the majority of Selectmen to the point that just about every decision is considered based on the impact it will have on that development.

    Sandwich is like a little Greece spending itself into bankruptcy and South Sandwich Village is turning into just one more money pit the town has decided to support.

    Has anyone completed a cost/benefit analysis of South Sandwich Village? I mean real numbers crunching on how it will affect the Town. I’m totally serious when I say I expect to see South Sandwich Village on 20/20 or 60 Minutes someday -and they don't investigate situations because they ended well...

    Is it true that one of the candidates for Selectmen offered to share office space with the SEIC? If the candidate for Selectmen who's looking for a roommate wins, is anyone else concerned about a sitting Selectmen sharing office space with the SEIC?

    Until more than just a handful of citizens start asking questions and demanding answers nothing will change.

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    1. The SEIC does not have office space. All that is explained in the SEIC meeting minutes. The SEIC has been through almost all the $50,000 I'm told, so it will be interesting to see what the town got for their money. People make political decisions through their emotions. And with this form of government we are wide open for that stuff. Where is the accountability to the people of Sandwich on anything?

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  19. Jane,
    The article related to the golf course is basically funding that department with money collected from golf course receipts which is deposited into an enterprise account. I believe that they cover their operating expenses in this way. They did recently do a business plan and it is my understanding that this has improved the revenue/expense ratio at the course. What they do not cover is the debt service from the purchase of the course. A few years ago this amounted to $450,000 but it has probably gone down a bit since then. Many have argued that the course should cover its debt service, but it has not been able to do this. Just wanted to set the record straight.

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    1. The golf course is an investment for the town but the price we pay is decreased town services in other areas. Given the amateur form of government that really isn't anyone's fault. We are forced to endure these mistakes and everyone seems to just make excuses for them. There is no motivation to solve a problem efficiently and quickly for financial reasons. It is always easy for people to spend other people's money. Think of the power the men who run the town on our money must feel. It's public money. They don't loose money if they make a mistake. They loose our money. Or if the public gets feed a bunch of garbage for political reasons and refuses to take a pragmatic step we pay the price financially and where our town's assists are concerned. Millions of taxpayer dollars wasted in the course of recent history in this poor old town and no way to put a stop to it really. No one cares. They just want to keep what they have and play with it some more. How many men have you seen come to the BOS saying they would make the hard decisions? Yet what get's done? It is usually more services cut and upkeep ignored.

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  20. @ AnonymousMay 8, 2012 10:26 PM

    Just based on the documents provided at Town Meeting it looks like the golf course took in just under #128,000 less than budgeted but I'm sure the deficit is higher.

    There's no reason more detailed financial records can't be posted on the Town website. We need more transparency on the "special projects" esp. South Sandwich Village.

    You'd think the Town would voluntarily undergo a State Division of Local Services audit for their input on capital planning, but no they do not want another opinion on how to better spend our tax dollars.

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  21. Carl Johansen would state to to Ms. Logan that in regards to the candidate the offered his office space to the SEIC, as a sitting member of the SEIC Board of Directors.

    One member of the board of Selectmen, presently has his office upstairs in the same building.

    The following is from the minutes of the SEIC board of director meeting minutes.

    March 7,2011

    Tim then announced that he would like to donate office space to the SEIC located at 335 Cotuit Road. The space is being made available to the SEIC indefinitly in the amount of $550 month, but on a deferred basis. Frank moved to accept the donation of office space and Peter seconded. All with the exception of Tim who abstained , voted to accept the donation of office space.

    It was signed by the Acting Secretary, John G Kennan JR.

    Any one reading those meeting minutes has a clear indication of what was written in those board minutes.

    You would have to understand the complexities of only having written meeting minutes , with out any voice recordings, as to the accuracy of the written submitted minutes to the town clerks office

    I hope this provides a little more clarity to your question

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