Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
The Honorable Mark J. Cusack, House Chair
The Honorable Adam G. Hinds, Senate Chair
Joint Committee on Revenue
State House, Boston
Dear Chair Cusack, Chair Hinds, and Distinguished Committee Members,
On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association appreciates the opportunity to offer testimony in support of S. 1617, filed by Senator Cynthia Creem and others, that would allow cities and towns to adopt a sales tax of up to 2 percent on the retail sale of alcoholic beverages. This would include sales in bars and restaurants and at package stores and other non-pouring establishments.
Revenue from this tax would be set aside locally in a special fund to help pay for substance use disorder and other municipal public health programs. Over the past decade, substance use disorder and public health issues more generally have become an increasing challenge at the local level, without much in the way of new resources to support locally-based responses. We all know that the opioid crisis has had a devastating impact on thousands of individuals and families in communities in every corner of Massachusetts. This bill would give cities and towns a dedicated revenue tool to improve public health services to address the opioid crisis and other critical public health issues.
Cities and towns have limited authority under state law to consider and adopt municipal taxes to supplement the property tax and pay for local government services. While reliance on the property tax remains high, local option taxes help cities and towns leverage local economic activity to pay for important municipal and school services. Current local option taxes are the jet fuel excise (enacted in 1985), the room occupancy excise (1985, 2009 and 2018), the sales tax on meals (2009), and the new marijuana tax (2017).
Year-end collections for fiscal 2018 totaled $212.5 million for the room occupancy excise (193 cities and towns), $133.8 million for the meals tax (234 communities) and $25.7 million for the jet fuel excise. The language of S. 1617 is based on the local option meals excise in Chapter 64L of the General Laws. The local option would be exercised by the local legislative body, as provided in section 4 of Chapter 4 of the General Laws.
According to the Alcoholic Beverages Control Commission (ABCC), in calendar year 2016 there were 9,793 section 12 licenses (on premises); 3,144 section 15 licenses (off premises); and 47 section 12C caterers’ licenses. With a total statewide retail sales of alcoholic beverages of $7.8 billion to $8.8 billion, it is estimated that a 1 percent excise would provide between $78 million to $88 million, if adopted in all cities and towns. This would have very little or no economic impact on the very strong retail alcoholic beverage industry, yet would provide vital resources to address essential public health needs.
We respectfully urge you to support S. 1617, and appreciate the opportunity to submit testimony on this legislation. If you have any questions, please do not hesitate to have your office contact me or MMA Legislative Director John Robertson at 617-426-7272 ext. 122 at any time.
Thank you very much.
Geoffrey C. Beckwith
Executive Director & CEO