Customers who buy food and drink at Harvard’s half dozen restaurants will not have to pony up additional cash to cover a town meal tax.
By a simple majority, the hundred-odd residents and officials who remained in their seats as Town Meeting (ATM) drew to a close Saturday afternoon voted not to levy a state-approved local tax on pizzas, doughnuts, hot dogs, lattes, or other prepared food served by Harvard businesses. Had it passed, the three-quarters of one percent tax (0.75 percent) levy—according to a year-old state Department of Revenue estimate—would have added $7,400 or more to the town’s General Fund. For a $1.75 cup of coffee, the tax would have amounted to roughly a penny; for a $16.95 pizza, 13 cents. The tax, however, would be in addition to the 6.25 percent tax the state of Massachusetts collects for meals. Harvard businesses already send $63,800 to the state in meals taxes, Finance Committee member George McKenna reported.
The state legislature passed—and Governor Deval Patrick approved— the so-called “local option” meals tax more than a year ago to give towns and cities a means to counter declining state aid. So far, 68 communities in Massachusetts have adopted the tax, according to the Massachusetts Municipal Association, but none of the towns surrounding Harvard has done so. The tax must be approved by Town Meeting.
Opponents of the measure included outgoing Board of Selectmen (BOS) Chairman Ron Ricci and newly elected Chairman Peter Warren. The article was supported by selectmen Lucy Wallace, Tim Clark, and Marie Sobalvarro, as well as the Finance Committee. Opponents argued that the tax would be an imposition on Harvard businesses, who, they said, are struggling to make ends meet in the current recession. Other speakers said the tax would discourage new business in town and would be an administrative burden to small businesses. “It doesn’t take much of a difference in cost to affect outcomes,” such as whether a restaurant decides to locate in Harvard as opposed to elsewhere, said Ricci, who spoke against the tax. “I think this is a very shortsighted approach to take [that would] annoy a bunch of businesses.”
Proponents argued that $7,400 in new revenue could cover a line item or two in the town’s tight 2011 budget. “When we dicker over $500,” said Clark, “$7,400 dollars is significant.”
Oscar Kaelin, whose wife is owner of a soccer supply store that relocated from Harvard to Acton, said he thought the downside risk to business was overblown and that the tax could be added to a point-of-sale system “in two minutes.”
“Yes, it’s not a lot of money,” said Wallace, “but if we’re serious about finding other sources of revenue, we need to say ‘yes’; otherwise we’re not taking advantage of an opportunity the state has given us.”
