OP-ED; Menino proposes to go for (tax) gold

ThomasM. Keane, Jr.
848 words
8 March 2002
Boston Herald
All Editions
029
English
(Copyright 2002)

Restaurants and bars in Cambridge and Brookline are popping the champagne corks. Boston wants to increase its meals tax.

That's just one of the proposals floated by Boston Mayor Thomas Menino this week in his bid to right the city's finances. City Hall is in a tizzy. The good times are over. It is, in the mayor's apocalyptic words, the "end of an era." Facing a revenue shortfall of between $30 million and $100 million, the mayor said, it's time for some tough measures.

This all comes from Menino's keynote speech to this week's annual meeting of the Boston Municipal Research Bureau. It's one of two major speeches Menino gives each year; the other is his State of the City speech.

One fun game for City Hall observers is to see how many of the promises made in those speeches ever come to fruition. In January, Menino vowed to make Boston's tax-exempt nonprofits cough up for any budgetary shortfall - an idea that fell flat because, in truth, those institutions have little new cash to give.

Sure enough, two months later the non-profits are off the hook. Now it's restaurant goers, along with parking scofflaws (the mayor wants to increase the fee for towing from $12 to $75) and Internet addicts (Menino proposed charging telecom firms $9 million annually for rights-of-way along city streets) who will foot the bill. All told, Menino figures these three will fetch $25 million annually.

But don't hold your breath. New taxes on restaurants and telecom firms seem unlikely; both would require legislative approval and face a likely gubernatorial veto. The boost in towing fees - which also requires state approval - makes sense, because it actually costs the city way more than $12 to tow a car (although less than $75). Still, lots of people own cars and they know all too well the real reason the city fields a team of meter maids so well organized and aggressive they would rival U.S. forces in Afghanistan: It's an easy source of revenue. Increase the city's incentive and it's a safe bet that even more cars will find themselves in Boston's tow lot.

Without new revenues, of course, Menino's only real option is to cut expenses. Gloom-and-doom budgets are already being prepared. Every department is under scrutiny. City schools face a big cut. The Parks Department and other seeming frills will take a hit. And the mayor is proposing an early retirement program for city employees. He won't fill most of the vacated jobs, saving as much as $3 million annually. (Leaving one to wonder: If those employees don't have to be replaced, why were they hired in the first place?)

In fact, things are so bad, the mayor's done the once unthinkable: postponed salary hikes for himself, the council and senior staff.

It's about time the city looked hard at its expenses. Boston has lived pretty high on the hog over the last few years. The budget in 1995 was $1.2 billion (excluding certain nonrecurring costs relating to the now-sold Boston City Hospital). Now it's $1.7 billion.

The number of city-funded employees (excluding hospital staffers) climbed too, from 15,600 in 1995 to 17,500 last year - this despite warnings from groups such as the Research Bureau that it was financially risky. Wage settlements with city unions have been rich; the firefighters contract last year was especially generous and unions are now eyeing it as a model for upcoming negotiations.

In addition, the city has never taken a hard look at efficiency measures such as consolidating services or using outside contractors. For the most part, city departments remain unchanged from the day Menino first took office in 1993.

Nor should it be very hard for the city to bridge the budget gap. The projected shortfall - almost all due to anticipated cuts in state aid - may sound like a lot of money, but really only amounts to somewhere between 2 percent and 6 percent of the annual budget. Meanwhile, over the last eight years, the budget increased by an annual average of over 5 percent.

One way of looking at the "crisis," therefore, is that it means the city won't be able to grow as much as it would like. And while the cuts are being made, City Hall can count on the good times returning soon.

Even as the city and state worry over the impact of the recession, the recession itself is over. By the time Menino's tax increases make their way through the legislative maw, they'll probably be unneeded. Budget crises like these disappear when the economy recovers. Good thing too. They may be tabled for now, but eventually, the mayor and City Council want their raises.

Tom Keane can be reached at tomkeane@tomkeane.com.

Graphic: TOM MENINO: Lookin' for revenue in unlikely places.

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