EagleTribune.com, North Andover, MA

June 17, 2013

Fiorentini to pitch hotel tax hike again

Mayor says increase to 6 percent can bring Haverhill an extra $78,000 annually

By Shawn Regan
sregan@eagletribune.com

---- — HAVERHILL — Mayor James Fiorentini is bringing back his proposal to increase the local tax on hotel stays.

City councilors haven’t been formally notified of the mayor’s plan, but they were tipped off at budget meeting last week when they noticed $78,000 in local-option hotel tax revenue in Fiorentini’s spending proposal for the new fiscal year, which begins July 1.

A state law enacted by the Legislature several years ago gives cities and towns the option of increasing the local hotel tax from 4 percent to 6 percent. Fiorentini pitched it for the first time in 2010, but City Council defeated it by a single vote

In an interview after Thursday’s budget meeting, the mayor said he will ask councilors to approve the local-option tax increase in a month or so. He said he’s confident it will pass this time.

The city generated $153,000 this year at the 4 percent tax rate, said the mayor’s aide, David Van Dam. Projections show raising the rate by 2 percent will increase the take to $231,00 next year, Van Dam said.

The local hotel tax, whether it is 4 percent or 6 percent, is on the top of the 5.7 percent state tax on lodging.

Councilor William Macek, who voted against raising the hotel tax two years ago, indicated he might vote for it this time.

Macek said he is inclined to support the measure because the tax money would stay in Haverhill and because it would be paid primarily by non-residents visiting the city.

“This is a transient tax that will help Haverhill residents, but will be paid mostly by people who are stopping here,” he said, referring to hotel guests.

“But I’m going to keep an open mind and make my decision at the hearing,” Macek said, referring to a public hearing that will allow supporters and opponents to voice their opinions before the council votes.

In 2010, the council rejected the local hotel tax increase the same night that it approved a local-option meals tax increase. The mayor’s budget proposal shows the city expects to generate $681,000 in meals tax revenue next year.

The hotel tax, like the meals tax, seemed on its way to being approved in 2010 until Brian Blinn, the owner of Best Western on Lowell Avenue, argued against it.

Blinn, whose father built the hotel, originally a Howard Johnson’s in the 1960s, told councilors that raising the local tax on lodging from 4 percent to 6 percent could eventually put him out of business.

“It has the potential to devastate my business and send my customers to Methuen and New Hampshire,” Blinn said at the 2010 hearing.

At that hearing, the proposal lost by a vote of four councilors in favor of the tax and five opposed. Joining Macek in voting against it that night were councilors Colin LePage and William Ryan and then-councilors Michael Young and David Hall. Voting in favor were councilors Michael Hart, Mary Ellen Daly O’Brien, Robert Scatamacchia and then-Councilor Sven Amirian.

In addition to the 110-room Best Western, Haverhill is also home to the 126-room Hampton Inn on Bank Road.

A proposal in January by a company to build an upscale 60-room Lexington hotel near Northern Essex Community College is still in the works, but is facing opposition from neighbors.