Worcester Business Journal

wbjournal.com | May 14, 2018 | Worcester Business Journal 21 Time to get smart on Mass. sales tax Gateway City holds huge potential V I E W P O I N T E D I T O R I A L With the Massachusetts Legislature in the midst of negotiations ahead of a July 1 deadline for approval of the state budget, the sales tax issue will likely come to bear before a potential ballot question in November, proposing to reduce the tax to 5 percent, which would give Massachusetts the second lowest sales tax in New England (aer New Hamp- shire's 0 percent) and the 17th lowest in the nation. Baker has already thrown his support behind the ballot question, as well as creating a permanent an- nual sales tax holiday, aer the last two were scuttled amid concerns over tax revenues. e Massachusetts House budget released in April didn't include any cuts to the sales tax rates, but the $41-billion proposal raised spending only 3 percent, so there is obviously very little appetite for higher tax rates. e Senate $41.4-billion budget proposal released last week has different priorities but still keeps spending levels almost the same. With unemployment levels hovering around a record low 3.5 percent, those additional workers are fueling a state tax revenue surplus projected around $800 million this fiscal year, which creates some room to work with on any sales tax reduction. Lowering the rate to 5 percent would take roughly W orcester is designated a Gateway City by state law, which creates an economic boost through increased funds for development. e term Gateway City emerged in 2007, describing midsize cities in Massachusetts anchoring regional econo- mies, but were struggling. ese were communities where manufacturing and good jobs once flourished, so the cities represented a gateway to the American Dream. But these cities later suffered economic decline and lacked the resources to reposition, rebuild and attract new investment. Immigrants and refugees resettled in Gateway Cities, meaning these com- munities were a gateway of opportuni- ty for new Americans. Massachusetts think tank MassINC helped coin and define the term: "While Gateway Cities face stubborn social and economic challenges as a result, they retain many assets with unrealized potential. ese include existing infrastructure and strong connections to transportation networks, museums, hospitals, universities and other major institutions, disproportionately young and underutilized workers, and perhaps above all, authentic urban fabric. Changing social and economic forces open up new op- portunities for Gateway Cities to leverage these untapped assets. Demand for walkable neighborhoods is rising and the small entrepreneurial businesses that fuel job creation in today's economy are increasingly seeking out urban innova- tive environments." MassINC expressed optimism about Worcester as "New England's second largest city and home to 10 colleges and universities. Worcester's relatively affordable housing, its MBTA and Amtrak connections, and its close proximity to Greater Boston's MetroWest are driving new growth." So, what does the term Gateway City portend for Worces- ter's future? I've viewed Worcester from many different an- gles. As CEO of a large New England nonprofit, I commit- ted early to keeping our corporate headquarters here. And two years ago, we decided to create a new, prototype client center here – to consolidate services in one location, but more than that, to develop a new model of holistic care. We made that commitment because Worcester is a Gateway City in yet another sense: For individuals and organizations, it can be a gateway to the future. Worcester is well-positioned by size and demographics to attract new in- vestment. It has a great dynamic for innovation and growth. ere is a welcoming spirit here, an inclusiveness promoting a sense of community. ere's also growing partnerships be- tween civic institutions, for-profit businesses and nonprofits. And some of the credit for that goes to public officials who don't play politics, but rather cooperate to advance the best interests of the city in a nonpartisan, constructive way. Leonardo da Vinci, the Renaissance genius, said there are three classes: "ose who see. ose who see when they are shown. ose who do not see." In past decades, we might not have seen such great potential in Worcester. But the evidence has grown so compelling, we should all see it now. Angela Bovill is president and CEO of Worcester nonprofit Ascentria Care Alliance. BY ANGELA BOVILL Special to the Worcester Business Journal Angela Bovill The Worcester Business Journal welcomes letters to the editor and commentary submissions. Please send submissions to Brad Kane, editor, at bkane@wbjournal.com. WO R D F R O M T H E W E B W $1.2 billion away in potential state revenue. At a time when healthcare costs are eating up a larger portion of the state budget, such a cut may be too drastic. A 5.5-percent rate would be a more realistic target. Baker has hinted at a grand bargain on his sales tax reforms with legislative leaders – along with looks at paid family leave and the state minimum wage – making this an opportune time to reduce the sales tax before the ballot question takes it too far. e permanent annual sales tax holiday, typically in August, needs to happen. e lost state revenue over the two-day holiday is more than made up by the increased spending at retailers in the state. (In 2016, the Retailers Association of Massachusetts said sales dipped 24 percent in August aer the tax holiday was eliminated). Moreover, reducing the sales tax rate from 6.25 percent to a more reasonable 5.5 percent will help retailers year-round, and leave Massachusetts in a tie with Maine with the second lowest sales tax rate in New England. e Massachusetts economy is continuing to strengthen. Since the state budget covers two years, now is the time to take a reasonable portion of that prosperity and feed it back into the local economy via sales tax relief. Tweets of the week "The Beechwood is so nice, some nights I just want to crash to enjoy the luxury." - Patrick Lowe (@PatrickLowe9), May 8, on a WBJ story about the Beechwood Hotel's acceptance into elite hotel brand Preferred Hotels & Resorts "Rhode Island is awesome and has a lot to offer. We don't need the team. A great fit for Worcester ... Mass. has a much bigger economy to backstop Worcester's bankruptcy. Win win. Good luck." - George Pratt (@GeorgeWPratt), May 5, on a WBJ's story about conversations among Worcester officials and business leaders to bring the Pawtucket Red Sox to Worcester Facebook feedback "Hey Donald what the heck are you talking about! Here we go again make America great? Donald not one word from you about this!" - Tony Evangelous, May 1, on a WBJ story about average gas prices in Massachusetts reaching $2.75 per gallon "Doesn't sound like affordable housing." - Paula Leva Lea, May 1, on a WBJ story about the Indian Hill school building in Worcester being redeveloped into apartments W D uring his speech at state Republican Convention in Worcester at the end of April, Gov. Charlie Baker made it abundantly clear one of his priorities for the campaign and perhaps this year's state budget is relief from Massachusetts' 6.25-percent sales tax, which is the 13th highest in the nation and the third highest in New England.

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