Eagle Tribune: Andover needs spending control, not tax hikes

Published: August 31, 2009 01:52 am

Andover needs spending control, not tax hikes

Andover residents will be asked at a Special Town Meeting tonight to boost the local hotel tax and add a local meals tax on food served at its restaurants.

Residents should reject both measures. The increased taxes will hurt two important segments of the town's commercial base. And balancing the budget by increasing taxes does nothing to address the town's fundamental problem: an excess of spending, particularly in its labor contracts.

Andover officials say they would use the estimated $600,000 raised by the two tax proposals to help close a $2 million budget deficit. Yet town boards are split over their recommendations on the tax plan.

Both the Board of Selectmen and the Finance Committee will recommend against adding a 0.75 percent local component to the 6.25 percent state meals tax. The proposal would generate an estimated $276,000 in revenue for the town. The School Committee supports the meals tax.

The selectmen and the School Committee will recommend approval of an increase in the local tax on hotel stays from 4 percent to 6 percent. The local tax comes on top of the 5.7 percent tax on hotel rooms collected by the state. The Finance Committee split 4-4 on a recommendation.

However the vote on the new taxes turns out, residents will need to meet again Oct. 7 in a Special Town Meeting to balance the budget. The town cannot set its tax rate until the budget is balanced.

It is true that Andover, like other communities, has been hit hard by reductions in state aid. But in the efforts made already to address its budget shortfall, some town departments have been more cooperative than others.

When the call went out from Town Manager Reginald "Buzz" Stapczynski earlier this year for wage freezes and raise deferrals to help the town through its fiscal crisis, many town employees — including the school system's administrators, independent employees and custodians — responded. But notable holdouts included the teachers and firefighters unions, whose contracts call for 3.5 percent raises.

Raises of that level simply are unsustainable, particularly when, as former Gov. Mitt Romney noted long ago, communities are limited by Proposition 21/2 to 2.5 percent increases in their maximum tax levy.

Such raises are indefensible when they are far in excess of the increase in the cost of living. Right now, because of the recession, our economy is in a period of deflation, that is, falling prices. Many workers in the private sector are seeing no raises and even wage cuts. How can public employees defend raises of 3.5 percent? How can the municipal leaders who agreed to such raises defend them?

Those who own and manage Andover's restaurants and hotels worry that the increased taxes will drive their customers away. These business already are heavily taxed.

Until Andover gets its spending — particularly that spent on employee contracts — under control, residents should not support tax increases of any kind.

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