GloucesterTimes.com, Gloucester, MA

May 14, 2013

Restaurant gains boost city coffers

By Richard Gaines
Staff Writer

---- — Spending in Gloucester restaurants increasing dramatically from fiscal 2011 to 2012, and while final figures for fiscal 2013 are not yet in — the fiscal year ends June 30 — Mayor Carolyn Kirk has projected “conservatively” to increase the estimate of revenue from the .075 percent local meals tax by $75,000 for fiscal 2014.

In fiscal 2011, the first full year of the local option meals tax, local patrons spent $50.6 million, generating $379,769 to the city budget.

In fiscal 2012, restaurant charges jumped to $66.5 million, an increase of 10.3 percent, and produced $499,070 in local meals tax revenues.

Through the first three quarters of fiscal 2013, revenues were about 5 percent higher still, according to figures from the state Department of Revenue.

In her $92.8 budget submission to the City Council last Tuesday, the mayor said her revenue projections included a $75,000 boost in meals revenues and a $50,000 boost in the lodging tax, 6 percent of bill on top of the state’s tax.

”These revenue estimates are also contingent upon a successful tourist season,” Kirk wrote to the council.

Rooms tax revenues dropped from $426,069 in fiscal 2011, the first year of the local option lodging tax of 6 percent, to $411,738 in fiscal 2012.

But the figures for the first three quarters of fiscal 2013 show a significant comeback in lodging revenues. Three three quarters, the city has already realized lodgings’ tax revenues of $347,436, according to DOR.

In one tradeoff, Kirk said she traced the increase in meals tax revenues to the drop off in parking meter kiosk revenue on the theory that the free parking at the Rogers Street, two-acre undeveloped city property known as I-4, C-2 has been a boon to restaurants.

“The free parking at that location has reduced the vehicles parking in other metered locations, and we have adjusted last year’s (parking) revenue figure down by $35,000,” Kirk wrote to the council. “On the flip side, we do believe that the increase in the meals tax is due in large part to the availability of parking in the shopping/dining area that includes I-4, C-2.”

Another sign that Gloucester seems to have shaken off the lingering effects of the burst real estate bubble, which was more extreme in the south and west, areas more subject to overbuilding and population expansion, is strong growth in the tax base.

“New growth on the tax base shows consistent growth and is estimated at $464,192, which is up approximately $114,000 from fiscal 2013,” Kirk wrote in her budget message. “This amount represents a consistent average of new growth over the past several years. The building permit revenue for the past two years has been solid.”

Richard Gaines can be reached at 978-283-7000, x3464, or at rgaines@gloucestertimes.com.