State Senate shoots down local option sales tax

By Stephen Betts | Jun 13, 2019

Augusta — A bill to allow municipalities to impose a sales tax on meals and lodging was dealt a blow Thursday when the state Senate rejected the measure

The House voted 73-70 on June 11 to pass LD 1254. The Senate, however, rejected the bill Thursday, June 13, by a 21-14 vote.

The bill would have allowed municipalities to impose a local sales tax of up to 1 percent on meals and lodging. The tax could not be imposed unless voters in the municipality voted for it at a referendum.

The tax could be seasonal.

Eighty-five percent of the revenues generated would stay with the municipality where the sales occurred. The remaining 15 percent would go to all other municipalities with the money to be used for treatment of opioid addiction.

State Sens. David Miramant, a Democrat from Camden; and Dana Dow, a Republican from Waldoboro, voted against the bill.

"I feel like we gave the state a new source of revenue with adult use marijuana and yet the state keeps obstructing the sale of that source. This bill also kept closing down from sales on all items to benefit service centers, to a bill that only taxed lodging. This meant that any town could put this tax on but only if they had hotels would they see more than a tiny return from other area collections. We need a progressive income tax to stop the income inequality that keeps growing and comprehensive tax reform to fund the state budget properly. I hope we move on to that in the next session," Miramant said after the vote Thursday.

In the House, Democratic Reps. Anne "Pinny" Beebe-Center of Rockland, Ann Matlack of St. George, Genevieve McDonald of Stonington, and independent Rep. Jeffrey Evangelos of Friendship voted for the bill.

Democratic Rep. Vicki Doudera of Camden and independent Rep. William Pluecker of Warren voted against the bill.

A majority of Rockland city councilors support such legislation. Councilor Valli Geiger has testified twice before the Legislature in support of the allowing municipalities to enact a sales tax, as well as asking the state to provide more revenue-sharing.

Pluecker explained his opposition.

"Our district does not have any service centers and the number of our very fine restaurants could be counted on one hand. Taxing folks extra on that rare occasion they have a little extra to go out to eat in Rockland or Camden doesn't make sense, and it especially doesn't make sense when we realize that the money has very little chance of making it back to our towns," the Warren independent said.

Doudera said, "While I like the idea that municipalities can vote on this option individually, I feel it is a regressive tax that will impact our low- income residents who wish to buy prepared foods or enjoy a night out, and I voted no. I would much rather see increased revenue sharing to our towns and am advocating for that way to help with high property taxes."

Matlack said, "Municipal Revenue Sharing funds have been significantly curtailed for nearly 10 years and municipalities have had to rely more heavily on property taxes. This bill allows towns and cities the option of adding a 1-percent tax on meals and lodging in their communities: 75 percent of these tax dollar will directly benefit local residents, while 25 percent of revenues raised will go to the Rural Development Authority, which provides financial assistance for economically distressed areas and  helps to develop and redevelop underutilized commercial industrial properties."

Beebe-Center said, "For service centers the cuts in revenue sharing and the educational funding formula based on real estate value and not factoring in income is doing extreme harm. I put a local option sales tax bill in, along with 4 other legislators. This bill, after much rewriting, is the only one that survived committee. It at least will provide some needed revenue to the towns, if the residents choose to pass a referendum."

Comments (5)
Posted by: Stephen K Carroll | Jun 14, 2019 08:10

Amy I respectfully disagree.  I believe as our senators who voted against this bill, that another tax is not the way to solve this problem.  We need the state to restore municipal revenue sharing.  This was the agreement and the state changed it in their thirst for more money.  There are two important issues that desperately need to be settled this year.  1) restore municipal revenue sharing and 2)  correct this twisted and confusing "school funding formula".  Perhaps go to a per student amount. This it seems would treat districts more equally.

Posted by: Amy Files | Jun 13, 2019 16:23

Wow. I am very disappointed to see that our Senator did not vote for this! Rockland bears an unfair burden of hosting a huge amount of non-profit municipal buildings, state and federal offices -- and a large influx of workers and people seeking these services who do not pay taxes here but who contribute to the wear and tear on our city's infrastructure. Being able to recoup a small amount of taxes on 1% on meals and lodging -- the lodging tax impacting mainly tourists -- is a fair and equitable way for the municipalities who host increased populations to help pay for the upkeep they need to. Without this all of the cost rests on the resident property tax payers -- some of whom struggle to stay in their homes. That representatives from other districts didn't see how it would help their own and so voted agains it -- leaving our City -- is really out-of-step with helping out your fellow communities and making sure that we are all thriving.

Posted by: Alison S McKellar | Jun 13, 2019 15:38

Currently, when towns are dealing with whether to allow certain things, whether marijuana, plastic bags, fast food, or whatever else, the only tool we have is to ban things outright if we want to mitigate an impact. Take plastic or paper bags for example. In most states, the town could choose to tax them and use the revenue for something positive. In Camden, we can only require that the retailer charge for them (and keep the money themselves) or we can ban them outright. Taxing them is another option that should exist. There are many things that have the potential to have a detrimental effect on our communities, and it would be great to have a tool other than banning them.

Many of the things that cost the town money are not enjoyed equally by all residents, but with the current system, property taxes are pretty much our only tool for taking care of roads and sidewalks and trash cans and storm water and police and all the rest of it.

At the local level, giving the whole town the option to vote on whether to add a special sales tax to a certain thing would be an excellent way of helping raise revenue through something other than taxes. It seems that Camden’s representatives have missed the point here. The bill should go way beyond restaurants and lodging, but giving us the OPTION to do at least this would have been the right thing to do. Each individual town has different issues and needs, and so this is an area where local people probably know best whether or not these taxes make sense for their communities.

Posted by: Mary A McKeever | Jun 13, 2019 13:47

Stephen, this sounds like a winning choice to me. People are taxed out of communities but soon will have no place to move to if this goes on and on. It must stop!  Property taxes should be reasonable so people could hold onto their homes.

Sate tax, property tax and Income tax. All are increasing and all that is left, would be for staples to live by. I do not know what solution would solve this. Perplexed!

Posted by: Stephen K Carroll | Jun 12, 2019 08:42

Now that the Democrats are back in power, I don't think our local legislators will have any problems finding ways to raise our taxes.  Yes local municipalities need more money coming back from the state to fill our purses, however adding a new tax will not solve this problem especially if some towns add the tax and some don't.  The real issue is "we want the state to send our money back to us".  Re establish "municipal revenue sharing".  All towns would be treated equally.  If towns could just correct the mistake of sending money to the State in the first place and then hoping they will somehow get it back.  Just don't send it.  The giant sucking sound is money being pulled into the big black hole in Augusta.

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