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.
Neale said he initially voted in that manner to buy himself some time to do his homework, and he came to support the bill after Department of Public Works Director Rob Desmarais told him how much money it would take to repair all the roads and sidewalks in Amesbury that need fixing.
Neale said his view was that Amesbury should be taking advantage of every possible revenue stream separate from property taxes to help tackle that problem, particularly one that targets discretionary spending while drawing money from non-Amesbury residents as well. He added that he doesn’t believe a 75-cent tax on a $100 bill would stop anybody from going out to eat in the city.
“I’m for getting as much money from other people to help us, I’m for a less aggressive tax, and I’m for trying to get a handle on our $50 million problem,” Neale said.
For some of the councilors who opposed the measure, the idea that the new tax would “only” add a few cents to most bills didn’t make any difference. They argued that Amesbury residents are overtaxed, and the council shouldn’t be approving any additional taxes, even small ones.
“I look at Amesbury in a similar way that many of us do in that it’s a community where many of us have grown up here, so it’s not very uppity,” Kimball said. “I know it’s only 75 cents on a $100 bill, but principally it doesn’t sit well for me.”
Regardless, by approving the measure, Amesbury becomes the 18th community in Essex County to adopt the local meals tax, joining Newburyport, Haverhill, Ipswich and others. The new tax will also remain lower than the 9 percent state meals tax that New Hampshire charges, meaning Amesbury restaurants will retain a competitive advantage over establishments in Seabrook and Hampton.