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May 15, 2013

Council OKs meals tax

Measure narrowly approved in 5 to 4 vote

AMESBURY — The divisive local meals tax proposal narrowly passed at last night’s City Council meeting, with councilors approving the measure in a 5 to 4 vote.

As a result, Amesbury restaurants will soon begin charging an additional 0.75 percent tax on top of the state’s 6.25 percent sales tax, or roughly 38 cents on a $50 tab. The new local meals tax will take effect on July 1.

Councilors Christian Scorzoni, Bob Lavoie, Robert Gilday, Anne Ferguson and Allen Neale voted in favor of the proposal, while Donna McClure, Joseph McMilleon, Jim Kelcourse and Derek Kimball voted against it.

As part of the bill, a new stabilization fund specifically for sidewalk repair will also be established. Scorzoni, the bill’s primary sponsor, said he estimates the local meals tax will generate roughly $200,000 in revenue annually, and his intention is for that money to be used for a specific purpose like sidewalk repair so those funds don’t need to keep coming out of free cash — unspent tax funds — or property taxes.

“What I want to do is establish a permanent funding source that could be applied toward the sidewalks, enabling continued improvement year to year,” Scorzoni said.

Much of the discussion that followed revolved around the benefits of having a new revenue source separate from property taxes compared to the drawbacks of having an additional tax when Amesbury residents already feel over overtaxed.

The point was also raised that the revenue would have to go into the city’s general fund first and would need to be appropriated to the new stabilization account separately, meaning there would be no guarantee that the revenue would be used for its stated purpose if future mayors and city councils choose to do things differently.

The tipping point in the discussion proved to be Neale, who voted “present” during the initial Finance Committee discussion but ultimately came around in support of the bill.

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