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Local Aid and Finance Cities, towns move to adopt new tax options
Cities and towns across the state have been using new local-option tax options to help balance local budgets in the face of slumping municipal revenues and local aid cuts of nearly $700 million in the fiscal 2010 state budget.
More than 100 cities and towns have voted or are actively exploring votes to adopt a local sales tax on meals of 0.75 percent or to expand the local room occupancy excise by up to 2 percentage points.
The Department of Revenue estimated that the new revenue options, enacted in June, could have generated as much as $74 million statewide if adopted for the full eight months allowed in the current fiscal year.
A majority of the cities and towns with the most to gain have enacted one or both of the new taxes for the second quarter of the fiscal year, which began on Oct. 1, or for the third quarter, which begins on Jan. 1, 2010. More than two-thirds of the communities that rank in the top 20 in estimated revenue from the new taxing authority have had successful votes, including Boston, Worcester and Springfield.
Not surprisingly, few of the 100-plus towns that would raise either no or very little revenue have held local votes.
A handful of cities and towns have voted to reject one or both of the tax options.
With budget woes expected to continue in fiscal 2011, the MMA expects that almost all of the cities and towns that can generate any meaningful revenue from the new tax options will bring the question forward to local legislative bodies before next July 1. Cities and towns that did not vote by the end of November in order to start collecting the new taxes on Jan. 1 will have until the end of February to vote to begin collections during the current fiscal year.
The Division of Local Services’ Web site lists the cities and towns that have voted to adopt the new taxes. The list does not include municipalities that have held local votes but have not yet provided official notification to the DLS.
Local Aid and Finance Cities, towns move to adopt new tax options
Cities, towns move to adopt new tax options
Cities and towns across the state have been using new local-option tax options to help balance local budgets in the face of slumping municipal revenues and local aid cuts of nearly $700 million in the fiscal 2010 state budget.
More than 100 cities and towns have voted or are actively exploring votes to adopt a local sales tax on meals of 0.75 percent or to expand the local room occupancy excise by up to 2 percentage points.
The Department of Revenue estimated that the new revenue options, enacted in June, could have generated as much as $74 million statewide if adopted for the full eight months allowed in the current fiscal year.
A majority of the cities and towns with the most to gain have enacted one or both of the new taxes for the second quarter of the fiscal year, which began on Oct. 1, or for the third quarter, which begins on Jan. 1, 2010. More than two-thirds of the communities that rank in the top 20 in estimated revenue from the new taxing authority have had successful votes, including Boston, Worcester and Springfield.
Not surprisingly, few of the 100-plus towns that would raise either no or very little revenue have held local votes.
A handful of cities and towns have voted to reject one or both of the tax options.
With budget woes expected to continue in fiscal 2011, the MMA expects that almost all of the cities and towns that can generate any meaningful revenue from the new tax options will bring the question forward to local legislative bodies before next July 1. Cities and towns that did not vote by the end of November in order to start collecting the new taxes on Jan. 1 will have until the end of February to vote to begin collections during the current fiscal year.
The Division of Local Services’ Web site lists the cities and towns that have voted to adopt the new taxes. The list does not include municipalities that have held local votes but have not yet provided official notification to the DLS.
Written by MMA Legislative Director John Robertson
