NEWBURYPORT — The City Council approved the enactment of an additional meals tax that will add 75 cents on a $100 check in an effort to boost city revenue, but a similar measure to raise the lodging tax in the city was defeated last night.
Ward 4 Councilor Ed Cameron, who first proposed the idea of imposing the local option taxes in the city last fall, urged the councilors last night to support the measures. Cameron has estimated revenue from the meals tax option will be about $300,000, and the hotel tax would bring in an additional $18,000 to $20,000.
Through the measure, the city will bring the current 6.25 percent state meals tax to 7 percent. The additional revenue will stay within the city, rather than go to the state.
"I know there's been a lot of vocal opposition to this," Cameron said. "However, I do feel there's broad-based support for this across the community, who may not be as vocal."
After debating the issue themselves and listening to members of the public speak on both sides, the councilors voted to adopt the local option meals tax in a 7-4 vote, with Councilors Brian Derrivan, Ari Herzog, Steve Hutcheson and Tom Jones voting against it.
When councilors voiced concern about adopting the measure without any designation of the funds, Cameron entered a last-minute request to create a special reserve account that would designate half of the revenue from the local options meals tax to go toward upkeep of existing sidewalks.
Ward 3 Councilor Bob Cronin had called for raising the sidewalk budget to $210,000, to reflect additional money from the meals tax. Councilors were told last night that doing so wasn't allowed under state law — all the additional revenue has to go into the general fund, said the mayor's director of policy and administration, Drew Flanagan.
Mayor Donna Holaday would agree to a compromise — to set up the reserve account, he said.
Building a budget is going to get tougher in the next fiscal year, Cameron said, and the city has big needs to meet. The local option taxes are a way to diversify the city's revenue, he said.
Ward 2 Councilor Greg Earls also voiced his support for the meals tax, saying he saw no alternative. Each year at budget time, the councilors debate the document and there's "no appetite" for cuts, while the community still wants to see services and programs added, Earls said. Councilors cannot not cut and still add services without additional revenue, Earls said.
"This is where it has to come from," he said.
But other councilors expressed strong dismay at the move.
The city will likely soon seen the arrival of paid parking downtown, and to vote for that, as well as the local option taxes is "too much," at-large Councilor Steve Hutcheson said.
"There is an alternative revenue source called paid parking," he said.
Ward 5 Councilor Derrivan said the move to raise a tax was a matter of principle, as the city faces incremental taxes like these, as well as the paid-parking program.
"One by one, they stack up, where do we stop?" he said. "Enough is enough."
Ward 1 Councilor Allison Heartquist said she surveyed Plum Island residents and was voting in favor of it at their request. The city needs money for its schools and to make them go from "good" to "very good," Heartquist said.
At-large Councilor Jones pointed to the fact that restaurant owners will have to raise their prices to meet the tax increase, causing them to suffer another blow to competition.
"They're charging us more," he said. "What I'm hearing is we have a lot of needs in the city. We have a lot of wants in the city. What we need to do is prioritize what's important to the residents of the city."
The city has cut the size of the Department of Public Services and now wants to fund more for sidewalk repairs, he said.
"We don't have the people necessary to do the work," he said. "There comes a point when the host can no longer sustain those that live off it."
Councilors defeated a local option to raise the lodging tax with Councilors Cronin, Derrivan, Earls, Herzog, Tom O'Brien, Hutcheson and Jones voting against it. That would have increased the city's local room occupancy excise from 4 percent to 6 percent.
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