NewburyportNews.com, Newburyport, MA

May 14, 2013

Amesbury council to vote on controversial meals tax hike

By Mac Cerullo
Staff Writer

---- — AMESBURY — A final decision is expected to come tonight on the local meals tax bill, which has divided the City Council while drawing the ire of local restaurants.

A public hearing on the bill will be held at the City Council meeting scheduled for 7 p.m. in the City Hall Auditorium. If approved, the new local meals tax would impose an additional 0.75 percent charge on the price of meals in Amesbury, or 38 cents on a $50 tab. The local tax would be in addition to the state’s 6.25 percent sales tax.

Councilor Donna McClure will also introduce a new proposal to increase the local hotel tax in Amesbury from 4 percent to 6 percent, and Council President Anne Ferguson will propose an amendment to the city’s grant application process. Both of those bills will be sent to the Finance and Ordinance Committees for further discussion.

In addition, Mayor Thatcher Kezer is expected to submit the city’s annual budget for the 2014 Fiscal Year. A series of hearings on the budget is scheduled throughout the months of May and June when every city department head will discuss their budget with councilors before a final vote is taken on Tuesday, June 18.

The local meals tax was first proposed in March by Councilor Christian Scorzoni, who argued that the tax could generate an additional $200,000 in additional revenue for the city without further burdening homeowners.

Those funds could then be used for a specific purpose like road and sidewalk repair, he said, and the bill calls for a new special purpose stabilization fund to be created so that can happen.

At last month’s Finance Committee meeting, councilors were deadlocked on the matter, voting 4-4-1 on the bill and sending it back to the City Council with a divided recommendation.

Councilors Scorzoni, Ferguson, Robert Gilday and Bob Lavoie were in favor, while McClure, Jim Kelcourse, Joseph McMilleon and Derek Kimball were opposed. Allen Neale cast the final vote, choosing not to pick a side by voting “present.”

Beside a basic unwillingness to create any new taxes in the current political climate, councilors who voted against the proposal were skeptical that the funds raised would ultimately be used for their stated purpose, since all the money raised would have to go into the city’s general fund first, and then the mayor would have to ask the City Council for the money to be appropriated to the stabilization fund afterward.

The Ordinance Committee pointed that out too, sending a note to the council that more work would need to be done to effectuate the transfer of revenue from the local meals tax into the new stabilization fund. Despite that, the committee unanimously endorsed the proposal 4-0.

While the proposal has proven particularly divisive among the City Council, it has drawn united opposition from local restaurants in Amesbury, many of whom have signed a petition circulated by Kelcourse urging the council to reject the proposal.

Among those who have signed the petition are the owners of Cherry Bomb, the Barking Dog and Ale House, Hodgies, 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 an additional Subway employee.

Though the proposed local meals tax is a new concept to Amesbury, similar taxes are already in place in many surrounding communities. Newburyport and Haverhill both have their own 0.75 percent local meals tax, which were each approved in 2010.

According to the state Department of Revenue, half of the communities in Essex County currently have a local meals tax, including every city except for Amesbury and Lynn.

The combined tax would also be lower than New Hampshire’s 9 percent state meals and rental tax, keeping Amesbury at a competitive advantage over border communities like Seabrook.

Scorzoni said his revenue projections came from the state Department of Revenue, which tracks meals tax figures from around the state and provides data to local communities. He added that since Amesbury has used roughly $200,000 in free cash — or leftover tax money — on sidewalk repair over the last few years, the local meals tax would be a perfect alternative that would allow the free cash to be used in better ways.