New taxes will be on the table when the Special Town Meeting convenes in November.Selectmen discussed raising the hotel tax from 4% to 6%, and imposing a new .75% tax on meals.Several selectmen endorsed the idea of placing those taxes into a dedicated account specifically for capital projects, and the Town Meeting will be asked to create a special purpose stabilization fund for that purpose as well.
Town finance officials say that they are unsure of how accurate state estimates are on how much money could be raised from a meals tax.However, there were approximately 3,000 seats in restaurants across town earlier this year, and when Legacy Place is fully operational that should increase by another 1,500 or 1,600.
“This right now is an uncertain revenue stream,” said Town Collector Robin Reyes.
While, like meals receipts, the hotel tax figures rise and fall with the economy, officials estimate that raising it by a single percent will bring in an additional $196,000 and raising it by 2% will bring in $393,000.
Selectman Carmen Dello Iacono, who proposed a meals tax three years ago, said “no one wants to hear taxes at all,” but “all along the intent was to lessen the burden” on property tax payers.Dello Iacono also said he was in favor of earmarking the funds for capital improvements and pressed Town Counsel Joyce Frank for a method to ensure that is what they would be used for.
The option to raise meal taxes has been something municipalities have been requesting for many years according to Selectman Sarah MacDonald, once an aide to former State Representative Bob Coughlin.While she said that she understood it was a bad time to talk about raising any taxes, “now is probably the time to act on it.”
A more nefarious intent was seen my Selectman Jim MacDonald.He said that by giving cities and the towns the option to impose a meals tax it was the General Court’s way of passing the blame for tax increases to the Selectmen, and taking it off themselves.
His comments were given more strength when Keegan mentioned that if cities and towns went to the state with requests for funds in the future, Beacon Hill would be looking at whether or not used all the options at their disposal to raise revenue.Not approving this increase “could come back to haunt you,” he said.
Selectman Paul Reynolds said he wanted to hear from hotel and restaurant owners before the measure was approved.He also wanted to hear from Economic Development Director Karen O’Connell on what the impact of the tax increase would be.
Chairman Mike went a step further than Dello Iacono in proposing that all revenue from the hotel and meals taxes, including the 4% currently imposed in hotel rooms, be earmarked exclusively for building project needs.He noted that the recently approved Master Plan recommended a dedicated stream of revenue for capital plans.
“I don’t want one dime of this to go to operating expenses,” Butler said.“Not one dime.”
Butler said that for a period in the 1970s and the 1980s the Town made no investments in its infrastructure resulting in many poor conditions seen today.However, he said, “great progress” has been made in the past 10 to 15 years in producing a budget that is “very responsible” and has resulted in a much stronger balance sheet than many other towns enjoy.
Keegan said that capital improvements were the Town’s “biggest challenge,” and supported putting any new revenue into a capital account.He opposed dedicating any existing revenue streams, such as the current hotel tax, however, citing the already tight operating budget.
Dello Iacono proposed putting together a subcommittee of the board to examine all the issue further, and Jim MacDonald recommended expanding the group to include representatives of other interested committees as well.Butler promised more discussion on the topic at meetings leading up to the Special Town Meeting.
Ed. note: I was part of the Master Plan working group that recommended a dedicated stream of revenue for capital projects.
