Hotel, meals tax increases may net $1m

Estimates show the plan supported by selectmen could raise from $500,000 to more than $1 million a year, with the money to be spent on long-term improvements to 14 municipal buildings.

The idea will be put to a vote at a Nov. 16 Special Town Meeting.

If residents support the plan, Dedham would begin collecting the additional taxes Jan. 1 and hold them in a stabilization fund that also would be created at Town Meeting. The capital-improvement plan, similar to one in Arlington, would be voted on in the spring.

“We’re just trying to be creative,’’ said Selectman Carmen Dello Iacono, who introduced a similar plan three years ago that Town Meeting shot down.

Since then, selectmen chairman Mike Butler has renewed the concept and enhanced it, Dello Iacono said.

“It’s about discipline,’’ Dello Iacono said. “If we can establish these policies, I think we have a shot at it.’’

Under a new state law, towns can increase the hotel tax to 6 percent from 4 percent and the meals tax to 7 percent from 6.25 percent. The towns keep the new tax money to use as they wish.

Also on the Town Meeting warrant is an article calling for replacement of the Avery Elementary School, which is in such bad shape the state School Building Authority has agreed to reimburse more than 50 percent of the cost.

It’s not the oldest school building the town has, but it is definitely in the worst shape, said Board of Selectmen vice chairwoman Sarah MacDonald.

“There are a lot of big questions,’’ she said. “But we have huge capital needs, especially for a police and fire station. When you look at the projects we have over the next 30 years, you know you have to start somewhere.’’

On the question of hotel and meals taxes, neighboring Westwood and Canton are taking a wait-and-see approach until spring, selectmen said recently, while Norwood will also vote on the tax increases on its November warrant.

The state Department of Revenue’s Division of Local Services says 39 towns and cities have implemented the 0.75 percentage point increase in the meals tax, while 40 communities have raised the hotels tax to 6 percent.

Some towns have opted not to impose a higher meals tax, worried it would hurt local restaurants. Some are watching what others do, while others, like Dedham and Norwood, have the question on their fall warrants.

“Nov. 16 seems to be a big day for Town Meeting voters, and there are a bunch of these votes coming up,’’ said John Robinson, the deputy legislative director of the Massachusetts Municipal Association. “At the beginning of every quarter, we’ll see a bunch more come in.’’

Robinson said municipal association staff members have asked communities how they will use the money if voters approve the increases.

“We are hearing they are closing budget shortfalls or gaps that may arise by the end of the year,’’ he said.

The Massachusetts Restaurant Association opposes efforts to boost meals taxes, stressing that restaurants, like most local businesses, “are already reeling from the economic crisis,’’ according to its position paper.

Dello Iacono, though, said the move isn’t aimed at hurting residents and business owners. Rather, it would mostly affect those who pass through town and stop at its hotels and restaurants, including several new businesses at Legacy Place, a Route 1 mall that opened this summer.

Nestor Rodriguez, owner of Dedham Square’s Court Side Café, said he opposes a tax increase. He said business has already fallen as much as 40 percent since Legacy Place opened. Foot traffic is way down and an increased tax will just force diners to stay home, he said.

“Anything that is going to hurt the consumer’s pocketbook is going to kill us,’’ said Rodriguez. He said he’s had to cut staff to just one waiter and himself, and, “I don’t even have a dishwasher anymore. We do it.’’

Michele Morgan Bolton can be reached at mmbolton1@verizon.net.