Towns to Increase Excise, Meals, and Hotel Tax in Healey Plan

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State House News Service

Gov. Maura Healey on Friday filed a refreshed version of her local option tax bill that got a cool reception in the Legislature last session, again proposing a mix of local-level revenue sweeteners and policy tweaks aimed at empowering municipalities.

The governor's second so-called Municipal Empowerment Act would allow cities and towns to increase local taxes on meals, lodging and vehicle registrations, permanently authorize municipalities to permit hybrid public meetings, change state procurement laws, and create enforcement mechanisms to push utilities to more promptly remove double poles.

Healey's office said the bill is intended to help local governments "reduce long-term fiscal pressures, attract a talented workforce, provide high-quality services, and streamline operations to best serve residents."

"Every Massachusetts resident deserves to live in a community with high-quality local services, from safe roadways to access to good jobs and schools," Healey said. "Our administration knows that city and town officials know their communities the best, and that’s why we want to empower them with the tools to make the choices they need to provide the best local services that meet the unique needs of their communities."

At roughly the halfway point of her term as governor, Healey has championed a tax relief law she signed in 2023 as indicative of the state's ongoing dedication to making Massachusetts more affordable and competitive. Simultaneously, she has offered proposals to make it easier for taxes to go up at the local level.

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Like the version that did not get a vote from either branch last year, the bill Healey filed Friday would enable cities and towns to generate more revenue by raising the maximum local option tax on hotels, motels and other rentals from 6% to 7% of the price of a room. In Boston, the tax could rise from 6.5% to 7.5%.

The local options meal tax could increase from 0.75% to 1%, under the governor's plan. It also would allow a new local option surcharge of up to 5% on motor vehicle excise bills to generate revenue that could be dedicated to local stabilization funds.

Revere Mayor Patrick Keefe Jr. was enthusiastic about the local option tax provisions of the bill, saying he hopes his fast-growing city will leverage that new authority to raise money from people visiting Revere to pay for things like education, infrastructure, and new amenities and programs.

"Providing local options to grow revenue will allow Revere to position itself for the next generation without putting more of the tax burden on our homeowners," he said.

The governor's new bill also carries over from last year's bill the proposals to create new property tax exemptions for seniors, eliminate the requirement to publish notice of invitations for competitive bids on the COMMBUYS platform, allow the creation of Regional Boards of Assessors, increase from 30 years to 40 years the bond term for school project borrowing, and create a new Other Post-Employment Benefits Commission to examine issues around unfunded local liabilities for non-pension employee benefits.

Since last year's bill landed flat, Healey made a few changes.

New to the version the governor filed Friday is language that the administration says ensures "that anyone who administers fentanyl strips, including local public safety officials, will not be subject to criminal or civil liability." Healey's Department of Public Health last year issued a memo declaring that licensed health care workers will not be disciplined for distributing harm reduction supplies like fentanyl test strips.

The new version of the bill also includes measures meant to ease procurement of snow hauling services by aligning it with procurement procedures for snow removal, repeals a law that limits districts' ability to start in-house school bus services when private transportation companies are available, and alters the administration's approach to double poles, a perpetual thorn in the side of town halls that the state defines as "when a replacement utility pole is built alongside the pole to be replaced."

"We live in a time where the private sector is simply outpacing what local governments can do in terms of balancing a quality product for our residents with the ability to keep employment opportunities competitive," Gardner Mayor Michael Nicholson, president of the Massachusetts Mayors Association, said. "By empowering cities and towns to make the decisions they believe is best for the situations they are facing, the Healey-Driscoll Administration has proposed ways to build a stronger Commonwealth from the street level on up. This is Massachusetts meeting the moment to make sure we work for a stronger tomorrow."

Unlike last year's bill, what the governor filed Friday would not require towns to incorporate some of the statutorily prescribed budget processes that are currently imposed on cities, does not clarify procedures around certain regulatory fines and liens, and would not eliminate the requirement that a town print or maintain physical copies of annual town reports. The administration said it chose not to make those proposals again based on legislative committee actions and stakeholder input.

This year's version also does not address procurement for electric school buses and charging infrastructure or make permanent COVID-era flexibilities related to outdoor dining and takeaway liquor sales, since those provisions have become law through other vehicles in the last year.

Lawmakers last year bifurcated Healey's proposal, with some sections of her bill going to the Joint Municipalities Committee and other pieces landing in the Joint Committee on Revenue. Both halves died in a Ways and Means Committee during an election year when the cost of living was a top-of-mind issue.

As recently as this month, Healey has been declarative that she has no interest in new or higher taxes. "Hell no. No, no, no, no, no," she said last week when asked about the prospect of higher taxes to pay for her transportation and higher education proposals.

Asked last year how she squares her distaste for higher taxes with her municipal local option tax proposal, Healey made clear she sees the two as different issues.

"Those are local options, and what we've heard from some communities [is] that they want more tools at their disposal to deal with some of the challenges that they're facing," she told reporters in May. "And so that simply allows communities to make a decision, not the state."

Open government and disability advocacy organizations came out in opposition to the way in which Healey's bill deals with hybrid meetings. ACLU of Massachusetts, Boston Center for Independent Living, Disability Law Center, Common Cause Massachusetts, League of Women Voters of Massachusetts, Massachusetts Newspaper Publishers Association and others said the governor's idea does not guarantee remote access.

"It will shut people out of the democratic process by only allowing — and not requiring — municipalities to provide hybrid participation options. This is a core principle of a democratic process, and for disabled people and others, a fundamental civil rights issue," the coalition said. "Giving every government body complete discretion about how to provide public access to their meetings means people with disabilities, the elderly, people who lack access to transportation, and others who are simply unable to access in-person meetings will be completely shut out when city councils, select boards, or school committees decide to hold meetings exclusively in person."

The coalition said it support Rep. Antonio Cabral of New Bedford's bill (HD 368) requiring options for elected officials and members of the public to attend meetings in person or remotely.

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