City seeks new tax revenues, fee collection
Andrea Estes, Globe Staff
Monday, March 28, 2005
Boston has quietly begun ramping up fee collections and scouring
its tax rolls for new sources of revenue as Mayor Thomas M. Menino
struggles to limit property tax increases in an election year.
The city for the first time is charging boaters who dock in
Boston, and has sent thousands of excise tax bills to boat owners
who officials say have escaped payment in the past. It is laying
plans to track down Boston residents who evade Boston taxes by
registering their cars out of state. It is also billing some
businesses that claim to have been previously exempt, and it has
embarked on a new effort to collect from residents who owe personal
property taxes.
The efforts are meant in part to relieve pressure on property
taxes, which have risen despite comparatively healthy times for the
city. Boston is in better financial shape than it has been in
several years, since a state budget crisis forced drastic cuts in
2002. But state funding remains tight and city costs continue a
relentless ascent, with the price of health insurance and employee
salaries alone costing $40 million more in fiscal 2005 than they did
a year earlier.
With little left to cut, Menino is running for a fourth term with
the prospect of property taxes going up again. As his opponent, City
Councilor at Large Maura Hennigan, prepares a strategy that includes
attacking him on the issue, the mayor is repeating his calls for
relief from Beacon Hill.
''We are continuing to fight for new revenues for the city to
relieve the burden on the property owners of our city," Menino said.
''A 10 percent increase [in property taxes] one year, 10 percent
another year. How much more can they take?"
Menino is asking the Legislature for permission to tax businesses
that lease space at Logan Airport and to close a loophole city
officials say has allowed telecommunications companies to evade $31
million in taxes statewide, $9.8 million of which would go to
Boston. He is also once again lobbying Beacon Hill to tax restaurant
meals and parking spaces in private garages.
Menino has had only marginal success with the Legislature on tax
issues in the past, however, and while he waits for lawmakers, the
city is looking for additional funds it can collect on its own.
Hennigan said Menino is looking for additional revenue sources
because he has no plan to shore up the city's sagging downtown
business district.
''You have a downtown that is dying, not vibrant or vital," she
said. ''We have a huge office vacancy rate that means declining
revenue from office buildings. If there were a visionary plan to
revitalize downtown businesses, they would close the gap in revenue.
That's why he doesn't have enough money to run the city."
The city has decided to charge mooring fees of $1 per foot for
boats owned by residents and $5 per foot for nonresidents. Officials
said they do not yet know how much that will generate because they
don't know how many boats are moored in the city. Additionally, the
city this month sent out 6,400 excise tax bills to boat owners --
thousands more than they have in the past -- expecting to collect
$657,127.
Administration officials are working with City Councilor Robert
Consalvo of Hyde Park on ways to find potentially thousands of
residents who illegally register automobiles out of state. One plan
under consideration is a hotline, similar to the state's
1-800-IPAYTAX, that would allow callers to turn in violators
anonymously.
''It is not the biggest source of revenue, nor could it solve our
budget woes, but every little bit helps," said Consalvo. ''There is
also the fairness issue. People in the neighborhoods say 'I'm living
here and doing the right thing. Why isn't my neighbor?' "
Not all the revenue-generating efforts are going smoothly,
however.
After decades of letting the wholesalers and processors on
Boston's historic fish pier operate without paying property taxes,
the city is ordering them to pay. Five fish companies, facing bills
for back taxes totaling more than $1 million, have joined forces and
filed a lawsuit, arguing it was always understood they were
exempt.
They say that because the fish pier is owned by the Massachusetts
Port Authority, which is tax exempt, the businesses are also tax
exempt. For 25 years, the city had not challenged that position, the
owners say.
''The city has never tried to collect taxes before," said
Marshall Newman, a lawyer who represents the fish processors. ''For
some of my clients, it would be catastrophic if they had to pay. It
would mean the end of the road."
The city has enlisted the help of Massport, which is trying to
force the fish companies to pay. The agency has refused to extend
the fish companies' leases, which expired in December, until they
provide proof that they have paid. They are now operating without
leases.
Meanwhile, the city learned shortly after sending out bills March
7 that its boat excise tax effort was seriously flawed. Hundreds of
boat owners called from across the country saying they received
bills, even though they don't live anywhere near Boston.
Just about every member of the Charlesgate Yacht Club in
Cambridge received a bill, several members said. Some people who
received bills said they don't own boats.
City tax officials said they relied on a list provided by State
Auditor A. Joseph DeNucci of federally documented boats with Boston
listed as the hailing port.
But boats may list a hailing port that is not where the boat is
docked. The city has so far forgiven about 1,025 bills that it said
were in error.
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