A new .75 percent local tax on restaurant meals, unable to gain traction in City Council while twinned with a hotel tax hike, is coming back on its own.
The hotel room tax, which would raise the tax rate on room stays in the city from the state's 4 percent to an overall 6 percent, has been strongly opposed by local proprietors of inns and motels. Last week councilors, unable to come to a consensus over either tax or what the revenue generated by them should be spent on, tabled the entire package until next year.
But Mayor Carolyn Kirk's administration, seeing budget trouble looming, came back with a new proposal later in the week including only the meal tax levy. And the new proposal has changed the targeted use for the proceeds, abandoning proposed earmarks that included the Rose Baker Senior Center, Sawyer Free Library, fisheries commission administrator and tourism funding.
Instead, the money would go toward filling the city's snow and ice bill for the past winter, which now stands at $146,000.
If approved, the new tax would begin Jan. 1 and generate $166,000 over the last two quarters of the current fiscal year, which began July 1 and carries through next June 30.
Chief Administrative Officer Jim Duggan said last week that the amount of debate surrounding the rooms tax and the relative quiet from restaurateurs had spurred the decision to separate the two taxes. The Council's Ordinance and Administration Committee will hold a special meeting on the option taxes tonight at 6 in the council conference room in City Hall.
Council President Bruce Tobey, who was part of the Massachusetts Municipal Association lobbying effort to secure the right for cities and towns to adopt the option taxes, said Friday that he hadn't made up his mind about how he would vote on the new meals tax proposal.
The main question, Tobey said, was "will the community of restaurant owners in Gloucester, and customers, be adversely impacted."
"We have heard a lot from the hotel community that the increase in hotel tax is a bad thing; we have not heard from restaurants yet," Tobey said. "I am anxious to hear from those folks."
Scrutiny of the new taxes was heightened by the debate over how the money should be spent.
Kirk this summer first proposed using funds from both tax sources to fund the senior center, library and to keep open fire substations.
Later in the year, the now-dormant fisheries commission was added to list, and then, at the behest of the tourism industry, a yearly contribution toward tourism promotion.
But all of those proposals brought up issues from councilors, so Kirk dropped them and proposed putting the money toward the most pressing need: the snow and ice budget, which needs to be covered by the end of the year.
Patrick Anderson can be reached at 978-283-7000 x3455, or via e-mail at panderson@gloucestertimes.com
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