Towns consider tax hikes

The fiscal 2010 state budget allows municipalities to impose a .75 percent local option tax on meals, and to increase by up to 2 percentage points the maximum allowable local option hotel/motel tax.

The Foxborough Board of Selectmen at its June 30 meeting discussed taking advantage of the new tax-raising options, and plans to take up the matter again on Tuesday, according to board chairman Paul Feeney.

“It’s something we’ve got to look at seriously,’’ said Feeney, noting the town’s need for new revenues. Although the board will evaluate the impact of higher taxes on local hotels and restaurants, he said he believes selectmen will at least decide to put a proposal before a Special Town Meeting this summer.

Until now, municipalities could levy a tax of up to 4 percent on hotel and motel stays, on top of the state’s 5.7 percent hotel tax. The maximum figure for the local option tax has now been raised to 6 percent. (Boston was previously allowed a 4.5 percent hotel tax, a figure that has now been increased to 6.5 percent.)

Currently, 22 area cities and towns impose the hotel/motel local option tax, according to the state Department of Revenue’s website. All of those have set the tax at 4 percent, except Cohasset, which eliminated its original 4 percent tax in 1989.

The .75 percent local option meals tax is on top of the state’s existing meals tax. The new budget increased the state meals tax from 5 percent to 6.25 percent, paralleling the increase to the state sales tax.

Acceptance of the new tax options requires a favorable vote by the local town meeting or city council. The earliest any increases could take effect would be the second quarter of fiscal 2010, which begins Oct. 1. Communities would need to act by Aug. 31 to raise the taxes in that quarter.

But local efforts to raise meals and hotel taxes could face resistance from the business community.

John Stobierski, vice president of the South Shore Chamber of Commerce, said his organization has not taken a formal position, but is “very concerned about the potential impact of communities adopting this.

“At a time that restaurants and hotels are dealing with an extremely challenging environment, to make them more expensive and less competitive can be a problem,’’ he said.

But Geoffrey Beckwith, executive director of the Massachusetts Municipal Association, said that given the fiscal crunch facing cities and towns, he expects “a very large number of communities will examine these options’’ and most will take advantage of them.

Brockton Mayor James E. Harrington said he intends to seek City Council approval to raise the city’s 4 percent hotel tax to 6 percent, a change he does not expect would have “any real negative impact.’’ He said he also expects a discussion about adopting the meals tax.

“My sense is right now that because the state has already hit [restaurants], that we wouldn’t do it,’’ he said of a local meals tax. “But we want to make sure we at least take a look at it because certainly we need the revenue.’’

Quincy Mayor Thomas P. Koch has asked the City Council and members of his administration to “take a good hard look at these two options,’’ said Chris Walker, a spokesman for the mayor. Walker said Koch did not include any potential revenues from the new tax options in his fiscal 2010 budget, but believes adoption of the measures “is certainly worth studying.’’

Melissa Arrighi, Plymouth’s acting town manager, said the town’s administrative staff is evaluating both the financial benefits to the town and the potential impact on businesses of adopting the tax options. She said based on the results of that analysis, the staff will bring a recommendation to selectmen.

“We appreciate every time legislation is passed that allows the town to have some local options,’’ she said. “But in this case, we also have to balance how it would affect tourism and industry here.’’

Walpole Town Administrator Michael E. Boynton said the town’s administrative staff will be gathering information on the new tax options with the intention of bringing the matter before selectmen in the next month or so.

“One of the considerations is what is going to happen in neighboring communities,’’ he said.

Randolph Selectman Jim Burgess said his board informally discussed the local tax increases some weeks ago when the options were first being floated on Beacon Hill. Based on comments at the time, he does not believe his board would pursue it.

Burgess said Randolph’s businesses would suffer if the town adopted the tax increases and nearby communities did not. “If I’m going to go up on my hotel tax and Braintree and Canton and Avon and Stoughton do not, that’s going to put my businesses at a disadvantage,’’ he said. “The same with our restaurants.’’

William J. Plasko, chairman of the Norwood Board of Selectmen, said he expects his board will discuss the tax options once it receives information. He said he leans toward supporting the increases.

“I’m open-minded, but I start off being in favor due to the need for the increased revenues for the town,’’ he said.

John Laidler can be reached at laidler@globe.com.