Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
The Honorable Mark J. Cusack, House Chair
The Honorable Susan L. Moran, Senate Chair
Joint Committee on Revenue
State House, Boston
Delivered electronically
Dear Chair Cusack, Chair Moran, and Distinguished Members of the Committee,
On behalf of cities and towns across the Commonwealth, the MMA is writing to submit comments regarding a number of bills currently in the Committee. We appreciated the opportunity to provide testimony in-person at the hearing, but would like to offer additional comments on several bills that would allow municipalities to increase local revenue.
We strongly urge you to support H. 2858 and S. 1800, An Act to allow cities and towns to increase the local tax rate on meals, which would enable municipalities, with local legislative approval, to add an additional .75% to the local meals tax, creating a maximum meals tax of 1.5%.
Since 2009, when the Legislature granted approval of a local-option meals tax, 251 municipalities have adopted the measure at a rate of .75%. Currently, this option adds only a small amount to the cost of a meal. For example, on a $100 meal, the tax currently amounts to only 75 cents. Under this proposal, on that same $100 meal, the total meals tax would increase from 75 cents to $1.50.
While the cost is minimal to consumers, the meals tax can generate significant revenue for a city or town. In fiscal 2023, the local-option meals tax generated $151 million in municipal revenue statewide. This revenue can be used where the city or town needs it most, in order to support critical municipal services. Looking regionally, Massachusetts still has a lower meals tax rate than Maine, Vermont, New Hampshire, and Connecticut.
In addition, we ask for your support of S. 1773, An Act relative to a local option excise on the sale of alcoholic beverages for municipal substance abuse prevention and public health programs. Again, with local legislative approval, this bill would allow cities and towns to adopt a 2% excise tax on the sale of alcoholic beverages, with funds being dedicated to municipal substance abuse prevention programs and public health efforts.
Finally, we ask for your support of H.2923, An Act establishing a local option gas tax. H. 2923 would allow cities and towns to adopt, by local option, an excise tax on the sale of fuel and special fuels to retail dealers within such a city or town at a rate of 3 cents per gallon. Revenue generated would go into a dedicated Municipal Fuel Excise Transportation and Stormwater Fund, with specific guidelines as to how a municipality can expend these funds and the types of eligible projects.
As cities and towns continue to see expenses outpace local revenue growth, especially within the restrictive confines of Proposition 2½, finding other sources of revenue is critically important. We appreciate this opportunity to submit testimony on these important municipal revenue issues and thank you in advance for your consideration. If you have any questions or require additional information, please do not hesitate to contact me or MMA Deputy Legislative Director Jackie Lavender Bird at jlavenderbird@mma.org at any time.
Thank you very much for your partnership and your lasting support of cities and towns.
Sincerely,
Adam Chapdelaine
MMA Executive Director and CEO