Local restaurant owners, it turns out, don't like new taxes any more than innkeepers.
A proposed .75 percent local meal tax was beaten back this week by restaurateurs afraid it will drive diners out of Gloucester and to Rockport, Essex or further.
The meal tax returned to the Ordinance and Administration Committee after a plan to raise the local tax on hotel stays from 4 percent to 6 percent was eviscerated by motel proprietors earlier in the month.
Councilors voted unanimously against its passage.
Both tax plans are supported by Mayor Carolyn Kirk's administration to maintain city services that have been steadily eroding due to state budget cuts and falling local revenues during the recession.
Despite signaling little to no support for either tax in earlier meetings, the council will hold a public hearing on the meal tax at its Dec. 1 meeting and Ordinance and Administration is scheduled to take the hotel room tax up again in January.
"Local clientele do not want this meal tax," Sheree DeLorenzo of Cruiseport Gloucester told councilors Monday. "What is going to make them stop going to Essex or Ipswich?"
"If the tax is raised — if we lose one party, we are losing 5, 10 percent of business," said Dennis Silva of the Topside Grill on Rogers Street. "It is a psychological thing."
Earlier debate about the meal tax, when it was twinned with the room tax hike, had been complicated by plans to soften the blow for the industries by dedicating a percentage of the revenue to tourism promotion.
"I wasn't getting the picture," said Councilor Sefatia Romeo Theken, who had suggested bringing the meal tax back. "We were hearing, 'If you are going to do it, we want it back.' I wanted to hear from people."
When the Kirk administration first proposed the room and meal taxes, the proceeds were to be spent on a list of services, including the senior center, library, fire stations and fisheries commission.
The latest proposal would have dedicated the $166,000 in estimated meal tax collections toward paying off the city's snow and ice removal bill from last winter, which now stands at $146,000.
Now that the tax seems a remote possibility, Kirk said yesterday she did not know how the snow and ice deficit would be covered until a yearend audit is complete.
But already, Kirk said, one thing is certain: the city will not be able to afford removing snow from downtown streets in the middle of the night, like it had last winter to make things easier on merchants.
The final defeat of the tax package, Kirk said, will be another example of the city having to cut back the services it provides to residents because of dropping existing revenue sources and resistance to new ones.
"For the administration, we have to get back on message and keep making the case for why we need additional revenue," Kirk said. "The only option the state has given us is local option taxes."
After considerable lobbying from mayors across the state and the Massachusetts Municipal Association, the state Legislature allowed cities and towns to raise local option taxes this summer.
Surprising some, Tobey, who had supported the option taxes as MMA president and was critical of state Sen. Bruce Tarr for not supporting them, has opposed adopting them so far in Gloucester.
"This is the wrong place, the wrong tax and the wrong thing with regard to restaurants," Tobey said yesterday.
So far, 47 communities in Massachusetts have adopted the taxes, Chief Administrative Officer Jim Duggan said yesterday.
By specifying what she would spend the tax revenue on, Kirk demonstrated a need for the money, but the target of snow and ice removal came with its own complications.
"You are asking the people who don't own on Main Street to pay the bill for plowing our competitors," said Fred Shrigley of the Rhumb Line on Railroad Avenue, who called the city's decision to separate the two tax increases a "divide and conquer strategy."
Other restaurateurs pointed out the losses they suffered because of the city water crisis this summer: $40,000 in the case of Cruiseport, DeLorenzo said; $100,000 in the case of an unnamed restaurant, according to Cape Ann Chamber of Commerce Director Bob Hastings.
The connection between the city's drinking water woes and lack of long-term infrastructure investment, which requires revenue, was not mentioned.
Patrick Anderson can be reached at panderson@gloucestertimes.com or at 978-283-7000, x3455.
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