Rooms and Meals Tax
Gloucester Daily Times - July 23, 2009
Dinner at a restaurant and a night in a Gloucester motel room would become
more expensive under a local tax package being considered by the city and
ignored by the other communities on Cape Ann.
Made possible by state lawmakers in their recently passed budget, the hikes
would add a .75 percent local charge to the current 5 percent tax on meals
levied by the state and boost the local tax on hotel or motel room stays
from 4 percent to 6 percent.
According to estimates by the state Department of Revenue, if approved by
Gloucester before Aug. 31, the package would net the city $361,050 during
the last eight months of this fiscal year, which ends next June.
"We need to diversify the city's revenue sources to ease the burden on the
residential property owner and to maintain city services," Mayor Carolyn
Kirk said yesterday as she finished the formal proposal to City Council.
"The state Legislature has given us these revenue options, and if we don't
want to adopt them, we really can't complain about state local aid cuts."
But while councilors have given the option taxes favorable early returns,
the plan has already drawn hostility from the business community and
hospitality industry, already suffering from a recession and dreary summer
weather.
"I think it will hurt, especially if the mayor keeps the money out of
tourism," said John Orlando, proprietor of the HarborView Inn on Western
Avenue. "I am not for an increase that large."
"It will put Gloucester at a competitive disadvantage," said Bob Hastings,
executive director of the Cape Ann Chamber of Commerce.
As Kirk finalized the proposal yesterday, the Chamber of Commerce Board of
Directors voted unanimously to oppose "any new meal and hotel taxes that
would create different taxation rates between communities on Cape Ann,"
Hastings said.
"In general, the business community thinks it is a bad idea to pass taxes,"
Hastings said. "We don't want to see them in Gloucester and not the others.
It puts an additional strain on the tourist industry."
In Rockport, the other Cape Ann community with significant motel and inn
presence, recently installed interim Town Administrator Edgar Gadbois
yesterday said local option taxes had not yet been discussed by selectmen in
his presence or added to the special Town Meeting warrant.
Essex Town Administrator Brendhan Zubricki yesterday said the option taxes
had not been discussed by policy makers there and Manchester Town
Administrator Wayne Melville said selectmen in his town had dismissed the
taxes when they were being discussed on the state level.
"We are not interested," Melville said. "It would not generate enough
money."
According to the Department of Revenue, Rockport would make $123,149 in the
last eight months of the fiscal year if it approved the taxes - $49,929 in
meals and $73,220 in room tax.
Essex would make $110,084 in new meals tax and nothing in room taxes.
Manchester would make $36,393 in new meals tax.
In Gloucester, the $361,050 total would be made up of a $267,210 increase in
meals revenue and $93,840 in room revenue.
Those numbers are seasonally adjusted and no estimate was available for a
full year.
The local option taxes were approved by state lawmakers this summer as part
of the fiscal 2010 budget that also included a 25 percent hike in the state
sales tax.
Each community must approve the option taxes, through a Town Meeting or City
Council vote, for them to go into effect.
While the meals tax can only be increased by .75 percent, communities can
increase the room tax any amount up to 2 percent.
In Gloucester, should City Council approve the new taxes, debate is likely
to emerge on whether a percentage of the revenue generated should be
re-invested in tourism or used to support some of the areas where city
services have been eroded by budget cuts.
Kirk's proposal would put the new revenue into Sawyer Free Library and Rose
Baker Senior Center, two institutions whose popularity with residents was
proven when they were threatened to be shut this spring in response to a
firefighters union lawsuit.
In addition to those two areas, Kirk said yesterday she would also use the
money to pay for a part-time executive director of the now-dormant
Gloucester Fisheries Commission and to pay for snow and ice removal.
Councilor Joseph Ciolino yesterday said he would support the taxes if some
of the money went to replace the tourism director position Kirk eliminated
this year.
"It is pretty obvious that we need the revenue, but what I would like to see
is a portion set aside for some sort of tourism bureau and director,"
Ciolino said. "Right now there is no mechanism to bring in more tourists."
What are we going to do about it?
Tracey Muller
Bass Rocks Ocean Inn
107 Atlantic Rd.
Gloucester, MA 01930
tracey@bassrocksoceaninn.com
www.bassrocksoceaninn.com
Dinner at a restaurant and a night in a Gloucester motel room would become
more expensive under a local tax package being considered by the city and
ignored by the other communities on Cape Ann.
Made possible by state lawmakers in their recently passed budget, the hikes
would add a .75 percent local charge to the current 5 percent tax on meals
levied by the state and boost the local tax on hotel or motel room stays
from 4 percent to 6 percent.
According to estimates by the state Department of Revenue, if approved by
Gloucester before Aug. 31, the package would net the city $361,050 during
the last eight months of this fiscal year, which ends next June.
"We need to diversify the city's revenue sources to ease the burden on the
residential property owner and to maintain city services," Mayor Carolyn
Kirk said yesterday as she finished the formal proposal to City Council.
"The state Legislature has given us these revenue options, and if we don't
want to adopt them, we really can't complain about state local aid cuts."
But while councilors have given the option taxes favorable early returns,
the plan has already drawn hostility from the business community and
hospitality industry, already suffering from a recession and dreary summer
weather.
"I think it will hurt, especially if the mayor keeps the money out of
tourism," said John Orlando, proprietor of the HarborView Inn on Western
Avenue. "I am not for an increase that large."
"It will put Gloucester at a competitive disadvantage," said Bob Hastings,
executive director of the Cape Ann Chamber of Commerce.
As Kirk finalized the proposal yesterday, the Chamber of Commerce Board of
Directors voted unanimously to oppose "any new meal and hotel taxes that
would create different taxation rates between communities on Cape Ann,"
Hastings said.
"In general, the business community thinks it is a bad idea to pass taxes,"
Hastings said. "We don't want to see them in Gloucester and not the others.
It puts an additional strain on the tourist industry."
In Rockport, the other Cape Ann community with significant motel and inn
presence, recently installed interim Town Administrator Edgar Gadbois
yesterday said local option taxes had not yet been discussed by selectmen in
his presence or added to the special Town Meeting warrant.
Essex Town Administrator Brendhan Zubricki yesterday said the option taxes
had not been discussed by policy makers there and Manchester Town
Administrator Wayne Melville said selectmen in his town had dismissed the
taxes when they were being discussed on the state level.
"We are not interested," Melville said. "It would not generate enough
money."
According to the Department of Revenue, Rockport would make $123,149 in the
last eight months of the fiscal year if it approved the taxes - $49,929 in
meals and $73,220 in room tax.
Essex would make $110,084 in new meals tax and nothing in room taxes.
Manchester would make $36,393 in new meals tax.
In Gloucester, the $361,050 total would be made up of a $267,210 increase in
meals revenue and $93,840 in room revenue.
Those numbers are seasonally adjusted and no estimate was available for a
full year.
The local option taxes were approved by state lawmakers this summer as part
of the fiscal 2010 budget that also included a 25 percent hike in the state
sales tax.
Each community must approve the option taxes, through a Town Meeting or City
Council vote, for them to go into effect.
While the meals tax can only be increased by .75 percent, communities can
increase the room tax any amount up to 2 percent.
In Gloucester, should City Council approve the new taxes, debate is likely
to emerge on whether a percentage of the revenue generated should be
re-invested in tourism or used to support some of the areas where city
services have been eroded by budget cuts.
Kirk's proposal would put the new revenue into Sawyer Free Library and Rose
Baker Senior Center, two institutions whose popularity with residents was
proven when they were threatened to be shut this spring in response to a
firefighters union lawsuit.
In addition to those two areas, Kirk said yesterday she would also use the
money to pay for a part-time executive director of the now-dormant
Gloucester Fisheries Commission and to pay for snow and ice removal.
Councilor Joseph Ciolino yesterday said he would support the taxes if some
of the money went to replace the tourism director position Kirk eliminated
this year.
"It is pretty obvious that we need the revenue, but what I would like to see
is a portion set aside for some sort of tourism bureau and director,"
Ciolino said. "Right now there is no mechanism to bring in more tourists."
What are we going to do about it?
Tracey Muller
Bass Rocks Ocean Inn
107 Atlantic Rd.
Gloucester, MA 01930
tracey@bassrocksoceaninn.com
www.bassrocksoceaninn.com
Comments