SALEM — A well-attended meeting aimed at brainstorming fresh revenue ideas missed the mark Thursday after getting bogged down by a pair of evidently unpopular words: ticket tax.
The City Council’s five-member finance committee unanimously rejected a proposal to place a tax on entertainment tickets sold at Salem venues. The recommendation will go to the full City Council at its Thursday, March 14, meeting.
Councilor-at-large Tom Furey said at Thursday’s meeting that he is against a ticket tax, despite the fact that he is the one who filed the proposal to consider it. He was also against it in 2002 and 2003, when it was proposed under Mayor Stan Usovicz, approved by residents in a non-binding ballot vote, but got crushed by the City Council in a 7-to-4 vote.
“Tourism is the lifeblood and a lifeline for the city of Salem. It’s a major economic engine for the state of Massachusetts,” Furey said. “Without Peabody Essex Museum, the courthouses, hospital, college, power plant... we’d be in challenging times.”
The goal of his order was to find “other streams of revenue” to lower the tax burden faced by Salem residents — most notably seniors, he explained.
Moments later, Ward 5 Councilor Josh Turiel said he wasn’t ready to move in either direction on a ticket tax, “but I’d like to use this opportunity to get a lot more information about where this would be applied, where this could be applied, what structure it would take.”
From that moment on, the meeting was devoted to trashing the idea of a ticket tax.
“You’re creating a wrench between gears in a really well-functioning, well-running machine, and the machine includes the City Council,” said Rinus Oosthoek, executive director of the Salem Chamber of Commerce. “Parking rates have gone up. Our customers see that. We ourselves see that. Essentially, you add on, add on, add on.
“You’ve essentially created what you can to get new revenue,” Oosthoek continued. “With a $162 million budget, instead of (increasing it to) $166 million, $168 million, keep it at $162 for a change.”
Erik Rodenhiser of Gallows Hill Museum used the analogy of a business that would continually hike the price of a burger until it could no longer sell burgers. He also offered to help find other options for raising cash without hurting businesses.
“There are plenty of other opportunities for Salem as a city to make money off the tourism that won’t affect anybody in the room,” he said, “but will help them.”
Biff Michaud of Salem Witch Museum said his business recently spent $350,000 on city property outside the museum to increase pedestrian safety, but then faced higher business costs when the state increased the minimum wage. The museum ended up having to up ticket prices by a dollar.
“We’re already at retail-refusal, where people come in and say, ‘This is really great, but geez, $25 to get in here?’ It was a big hit,” Michaud said. With minimum wages set to continue increasing gradually, he said, he’s estimating a $210,000 hike in payroll, and “I can’t raise my prices to do it.”
A ticket tax on top of all that, Michaud said, would be devastating.
“We don’t have an income problem here,” he said. “We have a spending problem.”
John Andrews, executive director of the Creative Collective, argued that the impact would be larger on the city’s smallest operations — the “artists, makers, people that do events for a living in Salem.”
“Any kind of tax of any kind will crush them,” Andrews said. “Making a living as any of those things isn’t easy.”
Big hit for small businesses
Kate Fox, executive director of Destination Salem, said some businesses would get hit harder if they don’t raise ticket prices, and instead try to absorb the cost of the tax.
“It may not be making a $10 ticket an $11 ticket,” she said. “It may cause an $11 ticket to become a $9 ticket for the business.”
Giovanna Alabiso of Haunted Footsteps Ghost Tours noted that a tax “is usually on a tangible exchange of goods. This is information.”
In closing, Furey reiterated his opposition to a ticket tax.
“I feel embarrassed to have you come here,” he said to the crowd. “I’m against a ticket tax. I was against it back then (in 2002). As time goes on, this is the point of the conversation that will need to be answered: if not now, when? If not a ticket tax, what?”