Conflicting views on proposed Dewey GRT

August 30, 2013

Anna Legates’ letter of Aug. 23 misleadingly complains about the gross receipts tax recommendation of the Budget and Finance Committee to the town council in June (which she would not support), apparently to justify her vote against even a non-binding resolution of the voters on the topic. Legates says “I respect the will of the people,” but she wouldn’t give her constituents the chance to express their “will” in a public vote.

She further says, “I won’t permit the fast tracking of a political agenda to trump transparency, accountability and good governance.” Her statement does not reflect the facts. The town council appointed the Budget and Finance Committee to address the issue of fair share, which Legates has promoted for years with pie charts at meeting after meeting showing how the business community does not fairly contribute to the cost of running the town (it pays about $60,000 of out a town budget of $2.5 million).

The committee’s proposal was not “fast tracked.” The committee held seven public meetings over an eight-month period, including a public hearing primarily for the businesses to comment; they were all properly noticed and minutes prepared and approved; the town lawyers were deeply involved in drafting the proposed gross receipts tax (which went through several drafts) and in assuring the committee that the town has the authority to tax gross receipts (including those of bars, but of course, not of packaged alcohol goods which is reserved to the state). The proposal was carefully crafted with great consideration of the smaller businesses; it was flexible in that the council could decide the tax percentage and the exemption amount within broad ranges; it did not take effect until January, 2014, and the first payments not due until March 2015.

In recognition of the pending Highway One lawsuit challenging the town’s authority to tax businesses, the proposal said it would not take effect until the lawsuit was completed, including all appeals (which could take another year after an initial decision this winter).

It was not “political.” All five of the town commissioners had indicated support for a “fair share” tax before the committee started its work. It was unanimously voted out of committee and sent to the town council, although two members of the committee subsequently changed their minds after businesses complained. They expressed concern that the committee would recommend anything the businesses disagreed with, even though the businesses stated that they would support only a property tax that individual property owners rejected in past referendums and that would impose far more taxes on individuals than business entities.

It was handled in a totally “transparent” manner. Copies of all the documents prepared for committee meetings were available at each meeting for public attendees to read and question. The committee recommended a public referendum be held before the tax would take effect; the most “accountable” measure of democracy. It was Ms. Legates, not the committee, that rejected such accountability. She wrongly complains the voters would have had “only a week prior to absentee balloting” to consider it. But the referendum was debated by the council July 19, two months before the planned Sept. 21 election.

The committee, in fact, measured up to every element of “good governance.”

But it was commissioners Legates, Mauler and Mayor Hanson who politically avoided taking a stand to give Dewey Beach a reliable, steady stream of income by hiding behind a business lawsuit - a really bad precedent the council may regret concerning future decisions.

And now these three commissioners have suggested the town should “negotiate” with the business community over future tax proposal. Will those negotiations be in a public forum or behind closed doors (in violation of FOIA)? Will the public be given a referendum to vote on the conclusions of the “negotiation?" Will the town allow the businesses to “pay” their fair share with “in-kind” services as the mayor suggested at the Civil League forum last week while the property owners who rent must “pay” a three percent accommodation tax? Let’s see who truly acts with the “transparency, accountability and good governance” Commissioner Legates endorses in her letter.

Joan Claybrook

Dewey Beach

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