NewburyportNews.com, Newburyport, MA

April 10, 2013

Amesbury restaurants say 'no' to tax hike

By Mac Cerullo
Staff Writer

---- — AMESBURY — Amesbury restaurant owners are lining up to oppose a proposed local meals tax that is currently being considered by the City Council, arguing that it could hurt their business.

A petition urging the councilors not to approve the new tax was presented to councilors last night, and so far 10 owners and a restaurant employee have signed it.

If approved, the local meals tax would impose an additional 0.75 percent charge on the price of meals, or 38 cents on a $50 tab. The local tax would be in addition to the state’s 6.25 percent sales tax. Newburyport approved a similar tax hike in 2010.

Councilor James Kelcourse, who opposes the tax and started the petition, said the owners of Cherry Bomb, the Barking Dog and Ale House, Hodgie’s, Leo’s Super Bowl, The Barn Pub and Grille, Stage Two Cinema Pub, Fat Cat’s Bistro, Mandarin Amesbury, Wild Bites and Subway, along with another Subway employee, have signed the petition and expressed their opposition to the tax.

“They’ll all signed the petition,” Kelcourse said. “It’s pretty much just one sentence that says I oppose the local option meals tax and I request that the City Council not pass it.”

Kelcourse said he started the petition after he heard supporters of the bill say they hadn’t heard of any opposition to the tax, and then went out to see if that was really true.

“When I asked if they had any support for this, a few supporters of the bill said they hadn’t gotten any opposition to the bill,” Kelcourse said. “Which meant to me that nobody had gone out and spoken to the businesses.”

When he went out and started talking to businesses, he said that most had only received a phone call or an email and hadn’t received much information about the proposal, if any at all.

Bob Taylor, the owner of Cherry Bomb, said the first he heard of the proposal was when Kelcourse came in to ask him about it. He signed the petition shortly afterward.

“I’m not in favor of any tax increases unless they’re absolutely necessary,” Taylor said.

Kelcourse said most of the other businesses he spoke to had a similar sentiment.

“I haven’t found one business who supports this,” Kelcourse said. “And it’s obvious that the public doesn’t support it either.”

Despite the apparent wide-ranging opposition, Mayor Thatcher Kezer said no businesses had called his office to express their opinion on the matter, and yesterday was the first he’d heard of the circulating petition.

Melissa LaChance, director of the Amesbury Chamber of Commerce, said she’d also just been made aware of the petition and was discussing the issue with her members who would be affected by the new tax.

LaChance added the Chamber isn’t ready to take a position either way at this point and won’t be until everyone has had a chance to do their homework and a consensus can be reached.

“We’ve been engaged in conversations and we want to support our members, so we’re trying to gather as much as information as we can,” LaChance said.

Since Councilor Christian Scorzoni first proposed it, the local meals tax bill has proven particularly divisive among the city councilors, who were deadlocked over the bill at a recent Finance Committee meeting.

At that meeting, the councilors voted 4-4-1 on the bill, sending it back to the City Council with a divided recommendation. Councilors Scorzoni, Anne Ferguson, Robert Gilday and Bob Lavoie voted in favor and Kelcourse, Donna McClure, Joseph McMilleon and Derek Kimball were opposed. Allen Neale cast the final vote, choosing not to pick a side by voting “present.”

The Ordinance Committee then decided to table their vote until April 16, meaning the bill likely won’t come to a full City Council vote until May 14.

Scorzoni, the bill’s main sponsor, said his reason for proposing the new tax is to create a new revenue stream outside of property taxes that could be used for a specific purpose. Scorzoni said the tax would create around $200,000 in new revenue, and his vision is for all of that to go into a special stabilization fund where it would then be used for road and sidewalk repair.

The trouble that argument has run into is that any revenue raised by the new tax would have to go into the city’s general fund first and then the mayor would have to ask the City Council to appropriate the money into the new stabilization account, which is a savings account of sorts. Kelcourse said his problem with that is there is no guarantee the money would end up being used for road repair if future mayors or councilors decided to go a different route.

The counter to that has been the fact that ambulance receipts are already used in a similar way, and even though those funds could theoretically be used for anything, tradition and precedent has dictated that they be used for that stabilization account, and the local meals tax could be done the same way.

Local meals taxes are becoming more common in Massachusetts, and similar taxes have been in place in Newburyport and Haverhill since 2010. According to the state Department of Revenue, every city in Essex County currently has a local meals tax except for Amesbury and Lynn, which is also currently weighing whether to introduce one.