HAVERHILL — The city is poised to take a larger bite out of hotel guests.
City Council is scheduled to consider tonight a proposal by Mayor James Fiorentini to raise the local tax on hotel stays by 2 percent. The mayor estimates the increase will add another $78,000 per year to city coffers.
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 the council defeated it by a single vote.
In a recent interview, the mayor said he’s confident it will pass this time.
Haverhill generated $153,000 in the fiscal year that ended June 30 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 $231,000 in the new fiscal 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.
Money from the proposed tax rate hike is already in the city budget, so if it were to be rejected, the shortfall would have to be made up with spending cuts or new revenue from another source. Tonight’s meeting is at 7 p.m. at City Hall.
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 additional tax money would stay in Haverhill and because it would be paid primarily by non-residents visiting the city.
City Council President Robert Scatamacchia, who voted to increase the hotel tax last time, said he intends to do so again. He said he does not believe the few dollars raising the tax would add to the typical hotel bill would cause people to look for hotels outside Haverhill.
“In my business, people are always asking for a recommendation on a good place to spend the night,” said Scatamacchia, who runs a funeral home. “They always want to know the closest place or the nicest place. No one has ever asked me what’s the cheapest place.”
In 2010, the council rejected the local hotel tax increase the same night that it approved a local-option meals tax increase. The new city budget 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 could eventually put him out of business by sending many of his customers to hotels in Methuen and New Hampshire.
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, 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.