Kezer, Moak push for Patrick's municipal relief package
BOSTON - Mayors John Moak of Newburyport and Thatcher Kezer of Amesbury joined Gov. Deval Patrick yesterday to press for quick action on the governor's municipal relief package.
The package, a series of bills which would give cities and towns new taxing powers that could lead to hundreds of thousands of dollars in new revenue for municipalities like Newburyport and Amesbury, is moving slowly through the Legislature.
Saying he wanted the Legislature to act before a municipal fiscal crisis erupts, Patrick called on local officials and his supporters to lobby lawmakers to get his legislation passed.
"If you want lower property taxes, if you don't want to see more schools close, tell us, show up, make your voices heard," Patrick told about two dozen local officials and scores of supporters. "They need to know you demand these reforms now."
A major component of the bill, and the part Moak has expressed particular interest in, would allow cities and towns to raise the 5 percent meals tax by 2 percentage points and to add a point to the 4 percent hotel tax. That's estimated to raise at least $250 million.
It also would end a property tax exemption on telephone poles. That is expected to raise $78 million.
As cities and towns like Newburyport have level funded most services, including education, police and fire fighting, Moak said the ability to hike the meals and hotel taxes would allow him to raise money to invest in the city's older infrastructure.
"We need to find new revenue sources," Moak said.
Kezer said new local taxes plus lifting the telecom tax exemption would allow Amesbury and other municipalities not to be dependent on the property tax.
"This will provide alternative revenue sources and take pressure off of Proposition 2 1/2 overrides," Kezer said.
It also would have a meaningful impact on its bottom line.
"Amesbury, based on a full 2 percent increase on meals, gets upwards of $300,000 in additional revenue," Kezer said. "That would be well used, for example, to maintain the downtown and clean it up, where most businesses generate that revenue and can benefit from the result."
Yesterday's rally came as the House of Representatives approved a part of the package allowing local governments to join the Group Insurance Commission, which purchases health care coverage for state employees. The move, if approved by the Senate, is expected to save cities and towns $180 million a year.
The Patrick administration and its supporters contend cities and towns will save millions by taking advantage of the state's buying power. Not all local cities and towns will benefit, the administration acknowledges. Gloucester, for instance, saw its health care costs drop 21 percent during that period.
There are other problems, too. While Patrick pitches the measure as a way to cut property taxes, House Republican Leader Bradley H. Jones Jr. said while he agrees with the spirit of the Patrick proposal he doesn't believe property taxes will be cut.
"I don't think anybody's property taxes are going down," Jones said on the House floor. "Some draconian decisions cities and towns make will be alleviated or obviated. But I don't think any property tax bills will be lower this or next year because of it. Maybe they won't go up as much as they otherwise would."
Local officials agreed.
"This package can't cut property taxes, but we can certainly slow the growth," Moak said.
The Patrick plan also faces legislative hurdles. While the GIC proposal cleared the House yesterday, and is expected to do the same in the Senate, other elements face an uncertain future. House Speaker Salvatore DiMasi, D-Boston, fears increases to hotel and meals taxes will be bad for the economy, and has said he'll oppose them.
"We looking for accountability (from local governments), and that needs to be done before raising any taxes," DiMasi said following the governor's rally.
Moak remained skeptical that the proposal would do any good once it was filtered through the compromises politicians make on Beacon Hill.
"I believe in the partnership act, but I think that as it gets watered down I don't think it will be as effective," Moak said.
For instance, a proposed meals tax would be good for Newburyport if it were done locally and not lumped together in a statewide coffer for distribution.
"We'd become a contributor again," Moak said, meaning Newburyport would put money into the fund but get little in return. "I'm only interested in it if it can be used as a local option."
Moak said there are some sure winners in the proposal, especially the formation of the Group Insurance Commission.
"That's a positive thing. If that gets through, that will be a positive portion of it," Moak said. "It is another step toward trying to find more revenues."
Newburyport City Councilor Larry McCavitt said the proposal could provide about $650,000 in revenue to the city. That's why, he said, the council voted in its last meeting to send a letter to the Boston politicians to urge them to support the act.
(This article replicated online with permission of the Newburyport Daily News, an Eagle Tribune Newspaper.)