If the administration of Gov. Deval Patrick and other state leaders really want to promote downtown business districts, they should forget about gimmicks and focus on the issues that really matter.
Last week, officials from the Massachusetts Cultural Council went to Newburyport to review our neighboring city’s application to earn designation as a “Cultural District.” There are 17 cultural districts in the state, with Gloucester and Rockport being the closest to our area.
The state Cultural Council was impressed with Newburyport, and it’s likely that the designation will be won. It will give Newburyport an advantage of sorts, particularly in attracting tourists, as the state intends to market the cultural districts to visitors and residents alike. It’s part of the state’s efforts to boost the “creative economy” in Massachusetts, certainly a worthy goal.
This was a measure that was birthed by the state Legislature about three years ago, in part to draw more tourist dollars and revenue to downtowns. It’s a good idea, but we can’t help but note that it bumps up against a particularly bad and pig-headed idea that the state’s lawmakers also inflicted on our cultural districts, as well as every other downtown restaurant and retail establishment.
About a year before the cultural district law was passed, lawmakers increased the sales tax by 25 percent, from 5 percent to 6.25 percent. It was a heavy blow to businesses in our area in particular, which have to compete against New Hampshire’s “tax-free” businesses. It was pitched as an emergency measure to help the state solve a looming deficit of over $1 billion.
Times have changed. Our economy has come out of its downward spiral. Unemployment has dropped and the private sector economy has improved somewhat. Most strikingly, the amount of money the state is collecting in taxes has drastically improved.
An example: State tax revenues in the first two weeks of August totaled $619 million, up $67 million or 12.2 percent from the same period last August. And that doesn’t include the $500 million tax hike that lawmakers approved in July.
But we still have the 6.25 percent sales tax rate, putting local merchants at a severe disadvantage.
It’s disappointing that our overwhelmingly Democratic state leadership lets the sales tax issue slide. It’s been well documented that sales taxes hit the middle class and working poor the hardest, but apparently the Democratic Party, which allegedly stands up for the middle and working classes, chooses to ignore that. The handful of Republicans in our state Legislature who try on occasion to get the sales tax lowered are beaten down.
It’s tough to make a go of it in a “brick and mortar” downtown. Newburyport has seen a lot of success, but it is no small struggle to make that happen — as we’ve seen in efforts to revitalize downtown districts in communities across the Merrimack Valley.
If our state lawmakers are really interested in giving more incentives to shopping downtown, they ought to revisit the sales tax hike and remove a major disadvantage facing our cities and towns as they struggle to compete with communities across the border in New Hampshire.