With new legislation approved by Gov. Deval Patrick that gives cities and towns the option to raise money through a hotel and meals tax, a recommendation has been made for Cambridge to do just that. On Monday, City Councilors are expected to vote on a suggestion from the Finance Committee to implement a 2 percent increase in the city’s hotel/motel tax and a .75 percent increase in the meals tax.


 

Book your dinner and hotel reservations in Cambridge now, because by October, it may not be as cheap.

With new legislation approved by Gov. Deval Patrick that gives cities and towns the option to raise money through a hotel and meals tax, a recommendation has been made for Cambridge to do just that.

On Monday, City Councilors are expected to vote on a suggestion from the Finance Committee to implement a 2 percent increase in the city’s hotel/motel tax and a .75 percent increase in the meals tax.

Cambridge currently collects a 4 percent hotel/motel tax. If adopted on Monday, the new local option will allow it to climb to 6 percent. Cambridge does not currently collect a meals tax.
Patrick’s $27 billion state budget for fiscal 2010 — which includes a 25 percent hike in the state’s sales tax — will have residents seeing a sales tax increase from 5 to 6.25 percent on their restaurant bills. An additional .75 meals tax increase for Cambridge would bring that to 7 percent.

Cambridge Finance Director Louis Depasquale said that if both local options are approved for this fiscal year, they would go into effect on Oct. 1. This would help the city raise $2.7 million — helping to make up for the additional $2 million in state aid funds lost during the state budget adoption. Tax collections are expected to raise more for the city in the following fiscal year, which begins July 1.

Cambridge also anticipates receiving close to $3.5 million in “federal stimulus funding” over the next 36 months to fund projects for homeless prevention and housing, street and sidewalks improvements, and energy efficiency initiatives.

“Any additional funds puts us in a better position,” said Depasquale. “This will make us even stronger.”

Cambridge’s fiscal 2009-2010 budget, at $444,212,850, represents a 2 percent increase from last year, and already factors in the previously projected $8.7 million reduction in state aid.
City Councilor and Finance Committee Chairman David Maher said the optional tax increases have been considered in many surrounding communities, and is a “necessary step” to help make up for lost revenue.

“I think people are very skittish about increasing any tax in a bad economy,” he said. “But I think people felt this will be a necessary step due to the financial situation.”
Robin Bell, executive director of Cambridge’s Office of Tourism, said the proposed tax hikes have been an ongoing discussion between the city and local restaurateurs and hotel managers, and seem to be inevitable.

“We are looking at all the implications of it,” she said. “Everybody is looking at the economy as a long recovery process, and knows there has to be some concessions.”

But Bell said she is reassured for the future, knowing that Cambridge is still a strong destination for tourists — noting the famed “Restaurant Week” coming in August, offering foodies cheap local eats for seven days.

“We just have to continue keeping the hotels and restaurants as full as possible,” she said.

Wicked Local Cambridge