Towns consider new local taxes

The local-option taxes, enabled under the new budget signed last week by Governor Deval Patrick, are being examined in communities including Newton, Natick, Lexington, Milford, Millis, Plainville, and Wrentham.

Some business advocates and opponents of higher taxes oppose the additional levies, but others say they are more or less inevitable, since they represent a new revenue source for cash-starved cities and towns.

“We anticipate that a large number of communities will adopt the taxes over time,’’ said Geoffrey Beckwith, executive director of the Massachusetts Municipal Association.

“I would assume that most communities are going to pass this as quickly as they can,’’ said Ted Welte, president and chief executive officer of the MetroWest Chamber of Commerce.

The budget signed on Monday by Patrick, covering the new fiscal year that started Wednesday, cut nonschool state aid for most communities in the region by around 29 percent, but included language allowing communities to increase their hotel occupancy tax from 4 percent to 6 percent, and to tack an additional 0.75 percent local tax onto the state’s 6.25 percent tax on restaurant meals.

Most communities anticipated the big cuts in aid, and had already trimmed their budgets accordingly.

But the new taxes pose an opportunity to get some of that money back.

The soonest cities and towns can implement the taxes is Oct. 1, and they must first be approved in processes that vary by community. The amount that can be raised will vary widely, based on the level of commercial activity.

In Newton, for example, Mayor David Cohen estimates the new taxes could bring in about $1.75 million more a year.

In Plainville, by contrast, Town Administrator Joseph Fernandes said the hotel tax would bring in virtually nothing, while the meals tax would garner about $80,000 more a year.

Even so, officials in both communities are likely to push for the taxes.

Cohen sent a letter to his city’s Board of Aldermen last week requesting the tax increases, and Fernandes said the Board of Selectmen in his town will probably put the meals tax - but not the hotel room tax - before Town Meeting voters this fall.

“It’s not going to make or break us, but in times such as these, every nickel helps,’’ Fernandes said.

He said the additional revenue would go a long way toward filling a $174,000 budget gap left by a larger-than-expected cut in state aid.

In Newton, the mayor also proposed using the additional funds to close a budget gap, as well as to restore a cut to transportation for seniors and provide additional funds to schools, and for parks and street maintenance.

Not everyone is enamored with the idea of new taxes.

Chip Faulkner, a Wrentham resident who is associate director of Citizens for Limited Taxation, said he will fight any effort to implement the taxes in his town.

“It certainly isn’t good during a recession,’’ Faulkner said. “To impose another tax, it just hurts business. People could lose their jobs in Wrentham, and the selectmen would only aid and abet that.’’

“Times are tough enough right now,’’ said Thomas O’Rourke, president of the Newton-Needham Chamber of Commerce. “It’s hard enough to get people to spend money right now as it is, and adding any new taxes is just going to make things more difficult.’’

But Beckwith, the Massachusetts Municipal Association director, said it’s important that communities have a new option to raise revenue, and said they will allow communities to be less reliant on property taxes.

“For those in the business community, they should recognize that having adequate municipal services, including public safety and school services, is important for their overall business base,’’ Beckwith said.

“Hopefully they’ll take a broader perspective and not take a narrow, special-interest view.’’