Businesses gather to discuss meal tax

By David Liscio / The Daily Item

SAUGUS - House Speaker Salvatore F. DiMasi is guest speaker on May 3 when Saugus and Lynn business owners and managers gather at the Kowloon restaurant to discuss a meals tax proposed by Gov. Deval Patrick.

The Lynn Area Chamber of Commerce (LACC), in conjunction with the Saugus Business Partnership and the Massachusetts Restaurant Association, is sponsoring the informational breakfast meeting.

Soon after taking office in January, Gov. Deval Patrick hinted at the possibility of meals taxes and other local surcharges as a way to reduce the state budget deficit, but the strategy didn't find much support among restaurateurs. By February, legislators were mulling the bill.

LACC Executive Director Kevin Donahue likened a local meals tax to tax classification. As he put it, "The short term may have a positive effect, the city may derive revenue from that tax, but where restaurants are looking to open up somewhere, that might be something they factor into the equation."

Steve Rima, owner of a McDonald's restaurant in Lynn, said a local meals tax would hurt business.

"Anytime there is a change in cost to the consumer, I lose business. It's that simple, whether it's an increase from health insurance or from a new tax," he said.

Rep. Robert Fennell, a Lynn Democrat and owner of a downtown Lynn diner, offered similar observations. Fennell noted that a two-percent local meals tax added to the five-percent sales tax translates to $7 in taxes on a $100 restaurant dinner bill. The increase could force some customers to dine out less frequently, he said.

Registration at the restaurant on Route 1 north is at 8:30 a.m. with a buffet immediately available. The program is from 9-10 a.m. Peter Christie, president and chief executive officer of the Massachusetts Restaurant Association, will also address the audience.

Reservations are preferred. For more information, call (781) 245-7070 or (781) 592-2900. Admission is $10 for members of the Lynn chamber and the Saugus business group, or $25 for non-members. Checks should be made payable to the Saugus Business Partnership. Mail checks to JCM, P.O. Box 289 Wakefield, MA 01880.

During a speech before the Massachusetts Municipal Association in Boston last January, the governor said he would close the state's deficit without reducing local aid. He also warned that providing money for cities and towns will be neither easy nor instant.

Patrick's suggestion of a "local-option tax", which would allow cities and towns to tax certain goods and services with the intent of easing property tax burdens, was met with a standing ovation.

"I trust you and your neighbors to determine whether a 1, 2, or 3 percent tax on lunch at the local pub is appropriate," the governor said.

Shortly after Patrick announced the possibility of a local-option meals tax, DiMasi slammed it as a hindrance to business. According to DiMasi, whose district includes Boston's restaurant-rich North End, the argument that a local-option only raises taxes in communities that want them simply doesn't make sense.

"Whether they raise it or we raise, it's allowing them to raise it," he said.