As the summer season comes to a close, revenue from two new taxes in Tisbury is helping to boost town finances.
Town administrator John (Jay) Grande presented summer totals from an occupancy tax increase and a new meals tax during the selectmen’s meeting Tuesday.
The occupancy tax increased from four to six per cent, leading to revenues of $95,309 for July and August. Last year during the same time period, revenues were $64,611.
The meals tax netted Tisbury $24,796, town treasurer Timothy McLean said in a phone conversation Wednesday.
“The meals tax we never had before; that was just new money that came in,” Mr. McLean said. Both the meals tax and the increase in occupancy tax were approved at a Tisbury special town meeting last April. They went into effect on July 1.
“It’s great news,” Mr. McLean said of the early numbers.
State law requires a 6.25 per cent meals tax on restaurant and takeout food. Towns then have the option to add .75 per cent, with the revenue going into the town general fund. According to a May report by the Massachusetts Municipal Association, about half the towns in the commonwealth have instituted the measure.
Implementing the meals tax has been “kind of a quiet process,” Mr. Grande said.
The occupancy tax in Massachusetts is a state-mandated 5.7 per cent, with an additional 6 per cent (6.5 per cent in Boston) that may be imposed by towns. Tisbury’s total occupancy tax is now the maximum 11.7 per cent.
Mr. McLean said there was not a clear way to tell from the raw numbers whether the occupancy revenues were due simply to the tax increase or to a better season overall for the town. Selectman Jeffrey Kristal, who owns the Crocker House Inn in town, said that he had noticed a busier summer, but that because the Crocker House Inn has only eight beds, quantifying the uptick was difficult.
News of the revenue comes at an opportune time for Tisbury, which is searching for new sources of income in anticipation of a budget crunch in fiscal year 2015.
“[Fiscal year] 2014 is fine; 2015 is going to be a challenging year for us,” Mr. Kristal said.
“We wanted to get in front of that issue well in advance of town meeting,” Mr. Grande said. Expenditures across municipal departments will increase, he said, and the town is working to offset the increases early. Initial plans are also underway to put a new roof on the Tisbury School building, an expense estimated at $300,000. The town has begun work on its capital planning, Mr. Grande said, with formal budget planning for fiscal year 2015 set to begin in December.
“There’s a variety of different sources of increases both the municipal and the school side need to plan for,” Mr. Grande said. “It may be a conservative approach but I think it’s wise.”