Communities plan votes on tax options

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

Municipalities need to act by Aug. 31 - through a positive vote of their town meeting or city council - if they want either tax increase to take effect the second quarter of the fiscal year, which begins Oct. 1. Otherwise, the next earliest time they could implement the taxes would be Jan. 1.

Winthrop’s Municipal Council voted July 28 to adopt the meals tax and to increase its hotel/motel tax to the new maximum local rate of 6 percent.

Council president Thomas E. Reilly said the $74,000 in revenue that the state projects the two local tax options will raise this fiscal year will help offset cuts in state aid to Winthrop, which were $772,000 deeper than expected.

And he called meals and hotel/motel taxes “more broadly based than property taxes,’’ and hence fairer.

The new local tax options are on top of the state’s existing meals tax of 6.25 percent and hotel/motel tax of 5.7 per cent.

State estimates of the revenues local communities could reap for the remainder of the fiscal year if they implement the meals tax Oct. 1 range from $7,757 for Topsfield to $669,445 for Saugus. Projected revenues from increasing the hotel/motel tax by 2 percentage points Oct. 1 range as high as $525,122 in Woburn. In 27 of the region’s 57 communities, the state projects zero revenue or makes no projections because each has two or fewer establishments.

Danvers plans to take up a meals tax and hotel/motel tax increase at a Special Town Meeting on Aug. 24. Town Manager Wayne P. Marquis, who proposed the town take advantage of the new options, said the revenue could be added to a fund the town maintains to repay debt on its middle school and high school building projects, and to help close a projected $200,000 budget gap resulting from a higher-than-expected drop in state aid.

In Revere, Mayor Thomas G. Ambrosino has requested the City Council adopt the meals tax and hotel/motel tax increases. He said his preference is to implement the options Oct. 1, which would generate an estimated $628,715 in added city revenue this year. The City Council on July 20 referred the mayor’s proposal to its Ways and Means Committee.

“We have no other choice,’’ Ambrosino said of the tax increases, noting that the city faces a $2 million budget shortfall due to the extent of state aid cuts.

The Woburn City Council will hold a public hearing Tuesday on a proposal to increase the city’s hotel/motel tax to 6 percent, and the council may vote on the matter that night, according to City Clerk William Campbell. Mayor Thomas McLaughlin proposed and a council committee this week recommended the city adopt the tax increase.

Saugus Town Meeting on Aug. 24 will consider proposals by Town Manager Andrew Bisignani that the town increase the hotel/motel tax to 6 percent and impose the meals tax. The state projects the options would raise a total of $756,351 for the town in fiscal 2010, including $86,906 from the meals tax, if they go into effect Oct. 1.

Bisignani said the new options “would bring in some needed revenues,’’ though he believes the state’s estimates are high. “It will plug a lot of holes that we have right now.’’

Burlington selectmen have decided to place a proposal before the Sept. 30 Town Meeting to raise the hotel/motel tax by 2 percentage points. Town Administrator Robert Mercier said the decision did not prompt much discussion.

“It’s one of those things people have come to accept,’’ he said of a hotel/motel tax. Mercier said selectmen are not proposing the meals tax as yet. “We just wanted more time to think about it.’’

Melrose Mayor Robert J. Dolan submitted a proposal to aldermen on July 20 to adopt a meals tax and increase the hotel/motel tax to 6 percent. The Board of Aldermen’s Appropriations Committee on Thursday voted to recommend that the full board approve the proposal.

In Somerville, Mayor Joseph A. Curtatone last Monday submitted a proposal to the Board of Aldermen that the city adopt the meals tax and hotel/motel increase. The board is expected to vote on the proposal Aug. 27.

In Gloucester, Mayor Carolyn Kirk on July 28 proposed to the City Council that the city adopt both local tax options. The council referred the proposal to its Ordinance and Administration Subcommittee, which last Monday continued the matter to later this month.

Kirk said that responding to feedback from the local restaurant and hotel industry, she is proposing that 25 to 50 percent of the new revenues be earmarked for promoting the city.

“We are trying to put together a structure that puts this new revenue to work in new ways for the city,’’ she said. “I’d just as soon take the time to get it right’’ even if it means the increases are not adopted prior to the state’s Aug. 31 deadline.