An increase to the local meal’s tax wasn’t on the menu Monday night, as the City Council voted unanimously against it at the urging of several members of the local business community.
Council President Dan Rizzo sat out of the discussion due to a potential conflict of interest with his new function hall business at the ITAM.
The proposal by Mayor Tom Ambrosino called for a 0.75 percent local increase to the meal’s tax at local restaurants and food service outlets. The increase would come on top of a 1.25 percent increase to the overall state sales tax that went into effect on August 1. Combined, the proposal would have taken the meal’s tax from 5 percent to 7 percent.
In Winthrop, over strong objections from their business community, that town has already approved the meal’s tax increase, taking its overall rate from 5 percent to 7 percent.
However, it wasn’t meant to be here, and the business community flexed its muscles and beat back what they called a new tax.
“We’re relieved it didn’t pass and it’s not because we believed people were going to leave town or that people couldn’t afford another 75 cents,” said Laurie Leone, executive director of the Chamber of Commerce. “It’s a new tax that can be manipulated and will not be repealed. It’s a mechanism that will be toyed with and raised…I think some of the surrounding communities are going to be surprised. I was in Winthrop and they felt it would pass here. We’ve preserved our own integrity.”
Mayor Ambrosino argued adamantly for the local option tax, saying that it was too much revenue to leave on the table in tough economic times.
“I know you are concerned about the restaurant community, but I want you to think long and hard about the viability of the city government of Revere,” said the mayor prior to the vote. “We can’t afford to leave this kind of revenue on the table. It is essential to weathering this year’s situation and the clouds forming over next year as well.”
It was one of the few major battles the mayor has lost – and it was a decisive one. Virtually no city councilor went for Ambrosino’s proposal, and some observers noted that with the mayor not running in 2011, maybe his domination of the council is coming to an end.
“I’m sure my power is waning,” he said. “That’s why it’s time to get out. All I can do is present to the council what I think is best for the city.”
He said it would be back to the drawing board now.
“Fiscal year 2011 will be a nightmare around here,” he said after the vote, “but yes, we’ll make it through [this fiscal year]. We will have a $2.2 million budget deficit without the meal’s tax and, pretty much, we will use all our reserves [this fiscal year].”
Of course, this being Revere politics, no important vote goes without a vast and prolonged behind-the-scenes lobbying campaign, and in this case, there was one going on for more than a week.
Apparently, the Laborer’s Union had been lobbying the mayor on behalf of City Hall Union employees for a return to regular working hours in September. City Hall workers had their hours cut down in July when City Hall began closing on Fridays. At the time, the mayor had indicated that he might be able to reopen City Hall in September.
As the vote on the meal’s tax began to approach, and it appeared more and more likely that it would be voted down, a high-pressure campaign aimed at certain city councilors began to develop.
Some on the council said the mayor fueled that effort, having allegedly told union leaders and union organizers that if they wanted their hours restored, they had better get the council to pass the meal’s tax.
“I’ve received phone calls from several people in the unions at City Hall,” said Ward 6 Councillor Charlie Patch. “The mayor told them it’s all up to us [the City Council], and that if we don’t vote for the meal’s tax, they’ll continue closing on Fridays. I don’t like that tactic.”
Several other councilors also indicated that they had been contacted and given somewhat of an ultimatum.
Ambrosino said he had nothing to do with that. He said he never intended to devote any money towards any specific purpose, such as returning city workers on Fridays. He said the whole union issue was unrelated.
“This is not a union issue,” he said. “It is a red herring. It came up because they were in my office recently, looking to get hours restored and waving my memo in my face that said I would consider restoring hours and opening again on Fridays in September.”
He added that the issue was revenue, not jobs, and the fiscally responsible thing to do was to take the money available.
“Frankly, it is fiscally irresponsible not to do this,” he said. “I’m concerned about the restaurants, but frankly, I’m far more concerned about the city of Revere’s finances. That’s what my job is.”
In raw numbers, the mayor indicated that the city is in deficit by $1.9 million and has a Rainy Day Fund totaling $2.2 million. Without the meal’s tax, the budget deficit is $2.2 million. The most recent estimate from the state is that the meal’s tax would generate $289,000 for the city from October 1 to June 30. The mayor said he believed that it could generate $600,000 annually.
His concern for city finances wasn’t shared in the business community or within the City Council, and from the beginning, the issue came down to a situation of the private sector versus the public sector.
Even steadfast supporters of the increase changed their mind in lieu of widespread lack of support for the measure citywide.
“The people I represent don’t want it and so I can’t be for it,” said Ward 3 Councillor Arthur Guinasso, who had previously voiced strong support for the increase. “I know one thing – the people don’t want the increase, and I can’t go with it.”
Added Councillor Tony Zambuto, “I was at two to three viable restaurants the past few days. Nobody is going to restaurants…I’m afraid this is the straw that will break the camel’s back. I’m afraid it will be the little bit that keeps people from going out.”
Others were adamantly opposed to it from the start.
“We’ve got to stop spending,” said Councillor George V. Colella. “Spending is what drives the problem I see to its ultimate end. It happened recently with the water and sewer rates…Until I see figures that show we absolutely cannot afford to adopt the meal’s tax this year, then I cannot support it.”
Said Councillor Jim Kimmerle, “I’m dead set against this meal’s tax increase…It’s getting way out of hand.”
In a separate matter, without much debate, the council unanimously approved an increase of the hotel excise tax, taking it from 4 percent to 6 percent.
Many viewed that tax increase as a much different story because it targets travelers staying at Revere’s hotels rather than local businesses and their local customers.
Rizzo also sat out of that vote due to a potential conflict of interest.