Thursday, October 8, 2009

Orders on Civil Service and Local Excise Taxes

This is background information on three orders which are on the Council agenda for the Tuesday, October 13 City Council meeting at 7:30PM at City Hall.


1) Civil Service

The first order would exempt the positions of Police Marshal and Fire Chief in the City of Newburyport from provisions of civil service law of Chapter Thirty-one of the Massachusetts General Laws. The civil service status of the persons currently in the positions of Police Marshal and Fire Chief would not be impaired; the change would take effect when these positions are next vacant. This is common practice in other municipalities which have pulled these positions out of civil service.


Without the constraints of the civil service laws for these two important positions, the City can select from a much broader and diverse group of candidates, which certainly increases the City’s ability to hire the best candidate for the position. For the Marshal position, the October 2001 Newburyport Police Management review recommended this change be adopted by the Council. As I've told the current Marshal and Chief, I'm proposing this change to put the City on the best footing possible going into the future and the proposed order is not a reflection on my perception of their performance. I appreciate their professionalism in protecting our public safety.


Other communities have made this change:

Somerville
http://www.mass.gov/legis/laws/seslaw06/sl060183.htm

Salisbury
http://www.mass.gov/legis/laws/seslaw05/sl050153.htm

Lowell
http://www.mass.gov/legis/laws/seslaw07/sl070046.htm


If approved by our Council, the State Legislature would need to pass a Home Rule Petition to enact this change.


2) Local Meals Tax

The second order concerns whether Newburyport should impose a local meals excise of 0.75%. Recently, the State increased the state meals tax from 5% to 6.25% and gave municipalities the option of adding an additional 0.75% which would stay in the community.


The following 32 communities have adopted a local meals tax effective October 1st, 2009:

AMHERST

AUBURN

BEDFORD

BLANDFORD

BOSTON

BROOKLINE

CAMBRIDGE

CHELMSFORD

CHICOPEE

DARTMOUTH

DEERFIELD

EVERETT

FRANKLIN

GILL

HADLEY

MEDFORD

MELROSE

NANTUCKET

NORTHAMPTON

PALMER

PLAINVILLE

RAYNHAM

SAUGUS

SOMERVILLE

SOUTHBRIDGE

SPRINGFIELD

SUNDERLAND

TAUNTON

TYNGSBOROUGH

WEST SPRINGFIELD

WINTHROP

WORCESTER


3) Local Hotel Tax

The third order concerns whether Newburyport should amend its local room occupancy excise from 4% to 6%.


Taken together, the adoption of the local meals tax and the amending of the local hotel tax would be a step to diversifying the City’s revenue stream. Make no mistake about it--these are tax increases. But what is important to note is that now - with the Governor and Legislature approving these changes effective this Fiscal Year - the locally generated revenue stays here in town rather than go into State coffers. So we in Newburyport decide how we want to spend it.


Many cities and states have higher meals and hotel tax rates. For example, the state of New Hampshire recently increased its meals tax to 9% with no local option. The state of Rhode Island has a meals tax of 7% with a local option of 1%. Vermont is 9% and Maine will be increasing to 8.5%.


Much of the cost of the proposed meals tax will be paid by non-residents and virtually the entire hotel tax will be paid by non-residents. Because these excise taxes are small in nature – a $100 restaurant bill will be increased by 75 cents and a $200 B&B overnight will be increased $4 -- these incremental changes are not likely to have an impact on attracting tourists and diners to Newburyport.


The impact on residents will be real but this additional recurring revenue will help achieve important City priorities that will benefit residents and local business. Estimated annualized meals tax revenue for Newburyport, according to DOR, would be $282,658. Estimated hotel tax revenue with a 2% increase could be on the order of $30,000.


My recommendation to my fellow Councillors is that this additional revenue be targeted to specific City priorities rather than directed into the General Fund. For example, funds could be directed to downtown improvements including park, parking, and transportation; funds could be directed to neighborhood street and sidewalk repair; funds could be used to increase property tax exemptions for seniors or funds could be directed to specific education priorities.


Information from MA DOR on the administrative steps necessary to enact these changes is here http://www.mass.gov/Ador/docs/dls/publ/bull/2009/2009_15B.pdf

Public input on these matters will be important as the Council discusses these issues.


Sincerely,


Councillor Ed Cameron

edcameronNBPT@gmail.com

1 comment:

Susan said...

I think we have to do this and also put meters back. In my travels only Lawrence of all the cities--about 25, -that I have visited during working career were without meters.
Families are paying hundreds so that their children can play sports or an instrument etc. The current cap is 1300 per family, I believe. Who knows how many possible musical geniuses or Olympic winning athletes we are losing because families might hesitate to ask for reduction in these school fees because of lack of income?
We have to share sacrifice.