While the idea has some restaurateurs up in arms, Scituate officials are seriously considering a local meals tax that would raise money for town projects.
The tax would apply to all restaurants, from burger joints and coffee shops to fine dining and meals with waterfront views. Officials plan to request the tax during Town Meeting in April.
According to members of the town’s Economic Development Commission who suggested the warrant article, the tax would be 0.75 percent of a diner’s meal, or 75 cents for every $100.
“Based on the current revenue rates they track, [the state] estimated that incremental revenue would be roughly $200,000 … [that would be] revenue that isn’t coming in to the town right now,’’ said Chris McConaughey, chairman of the commission.
For months, the commission has been looking for ways to raise money for the town, discussing strategies with selectmen on how to develop Scituate’s business sector and putting out a townwide survey to generate ideas.
In May and June,
the survey was offered to Scituate residents and businesses, asking about everything from thoughts on development along Route 3A to the diversity and variety of businesses in town.
The results have been informative and surprising, McConaughey said, especially the response to a local meals tax, which was favored by 66.3 percent of residents who responded.
(This is separate from the state’s meals tax, a 6.25 percent levy on the cost of any meal in the Commonwealth. The local meals tax would be added to that, with that money going directly to the town for any designated purpose. The Legislature added the option for the 0.75 percent tax in 2009, and allowed each community to decide if it wanted it.)
Many cities and towns have already taken advantage of the local meals-tax option, which has been seen as a way to help raise revenue in an ever-difficult economic time.
In Norwell, for example, Town Administrator James Boudreau said a meals tax was installed last year, and the money goes directly into the town’s retirement obligations. In the fiscal year that ended June 30, the town collected a little over $145,000.
“We looked at it as a way we could put money into [retirement benefits] without having to take money from other operational needs, so that’s why we did it,’’ Boudreau said. “I don’t think we would have passed it if we didn’t have a dedicated use for it.’’
Scituate officials have seen that success, and want to duplicate it.
“There is no doubt this year [money will be tight] with the governor already announcing cuts to local aid . . . The town probably will be looking for extra sources of revenue,’’ said Selectman Joseph Norton, the board’s chairman.
“I’m not saying this is it, but we certainly don’t want to lay off anybody, whether it be teacher or public safety [worker]. We’ll be looking at it closely.’’
The taxpayers ultimately decide the issue, Norton said, which is fitting since they would be the ones paying it when they go out to eat.
“No one likes to raise taxes. No one likes to put an additional burden onto anybody; the restaurants in particular are struggling . . . [but] you have to weigh both sides of the issues and try to come up with what is best for the town,’’ Norton said.
For some restaurant owners, however, the tax would be a burden.
“I’ve been here 28 years. We already have 6.25, which went up from 5 percent a few years ago,’’ said Bob Warner, owner and manager of the Mill Wharf Restaurant. “I don’t know what they are proposing for it to go up to, but it’s a difficult time. Restaurant business is dependent on people with disposable income, and all [a tax] does is squeeze a little more.’’
While Warner said he was confident other restaurateurs in the area felt the same, Tim Marciano, a part-time manager at T.K.O. Malley’s, was less concerned.
“To be honest, I’m not sure. I don’t know if it would affect us too much. I don’t see it being a big change,’’ he said.
As the debate over the tax continues, officials would have to decide what the money would be used for.
Norton suggested that the funding could be used for the town’s Master Plan., which is looking to transform Gates Middle School into a new Town Hall, build a new middle school on the site of the current Town Hall, and build a police and fire dispatch station elsewhere in Scituate.
According to McConaughey, the commission has put forth a warrant article for Town Meeting requesting that any money generated by the tax be used by the commission to develop or implement things related to economic development.
“Our goal in the ECD is to help to better develop the existing business base in town as well as look for opportunities to broaden it, the ultimate goal to diversify revenue opportunities for the town,’’ McConaughey said.
He noted that only 3 percent of the town’s tax base consists of commercial properties, meaning 97 percent of the tax burden is on residents. If the town used the meals-tax revenue to expand the business district, residents would feel less of that burden. he said.