With ultimate goals of attracting more businesses and stabilizing the residential property tax rate, Council President Arthur Vigeant has called for the city to raise its hotel tax from 4 to 6 percent.
Vigeant wants the city to set aside the additional annual revenue, estimated at $450,000, for economic development.
The state last year gave communities the OK to increase their hotel and motel occupancy tax from 4 to 6 percent.
The City Council’s Legislative & Legal Affairs Committee on Wednesday voted 3-0 not to make a recommendation on the proposed tax increase. The full City Council is expected to vote on the proposal at its Nov. 22 meeting.
Vigeant asked his fellow councilors to give the idea a shot. If councilors find it’s not serving the right purpose, they can adjust the tax back to its current level.
“This is a real big deal. We’re looking to fund something that no one else in the state has had the guts to do on a consistent basis,” Vigeant said. “I’ll take the chance because I believe a year down the line we’re going to prove that this is working.”
The tax will not affect Marlborough residents, Councilor Joseph Delano contends.
Councilor Paul Ferro opposed the rationale that out-of-towners would pay the additional tax. He pointed to the city’s free cash, recently certified at $3.8 million, and its $7.3 million stabilization fund.
“If we have $11.2 million in cash today, why are we talking about raising taxes on any business in this economic environment tonight?” Ferro said.
Councilors Michael Ossing and Steven Levy, both members of the Legislative & Legal Affairs Committee, said they need more time and information before making a decision.
Ossing said he does not agree with increasing a tax and targeting the revenue for a specific purpose.
Councilor Robert Seymour said he supports Vigeant’s proposal.
“This is a tax that we’re not putting on the backs of our residents and it’s got a directed purpose,” said Seymour, Legislative & Legal Affairs Committee chairman.
Councilors should act quickly so that if they do increase the tax, the city would see revenue sooner rather than later, Seymour said.
The money could specifically help the Marlborough Economic Development Corp. expand its outreach to businesses. In a more specific example Wednesday, Vigeant said the city could use money to provide visitors with packets about the area.
“I think this is an opportunity for us to help Marlborough move forward,” Councilor Donald Landers said.
If the City Council approves the tax increase, the next step is voting to send a request to the Legislature for a home-rule petition, which would designate a specific fund for the additional revenue. The City Council would need to approve future transfers out of the fund.
This story originally appeared here