WATERVILLE — Area business owners, employees and municipal leaders said they were frustrated and disappointed when they learned about proposed increases in the state sales tax as well as meals-and-lodging tax Friday.
“It’s got to come out of somewhere; guess it’s coming out of me,” said Luke Duplessis, owner of Mainley Brews in downtown Waterville. “I think they’re ganging up on the wrong kind of business. The restaurant and hotel businesses are as tough as it gets.”
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The proposed budget by the Legislature’s Appropriations Committee was given unanimous, bipartisan support early Friday morning and included both an 0.5 percent increase in sales tax and a 1 percent increase in the meals-and-lodging tax to help restore cuts made to municipal aid proposed by the governor. The increases are set to end in two years.
Despite the tax increases, some town officials still predict a substantial hike in property taxes. The increases in sales and meals taxes covers only about $135 million of the $200 in million state aid to municipalities.
“We’re going to lose enough money in this revenue sharing loss that property tax could rise two mills,” said Waterville mayor Karen Heck. Two mills is equivalent to a $200 increase for a property worth $100,000.
Waterville City Manager Michael Roy said even after the change, the city is still expecting about $550,000 less in state funding and will have to make several changes to make up the difference.
“It will most likely be a combo of reducing expenses, increasing property taxes and using more of our surplus,” Roy said.
Heck thinks Maine should learn from other tourist destinations and reap the benefits of Maine’s “Vacationland” qualities. Heck continued to advocate a substantial increase in the meals-and-lodging tax, taking the existing proposed 8 percent and nearly double it to 15 percent.
“You think people don’t go to Boston because of a city tax? People come up here because they want to come to Maine,” she said. “It’s mostly people not from Maine, so why wouldn’t we want to take their money?”
Not all agree, though. Sherry Kenney, a Waterville resident who was sitting at Selah Tea on Friday afternoon thinks the 1 percent increase in the meals-and-lodging tax could damage the tourist industry.
“I just think it’s counterproductive to the tourist industry,” Kenney said. “It goes against everything the state is trying to do by bringing people in. That 1 percent is pretty huge.”
Deon Bennett, 36, who was eating at Mainely Brews on Friday afternoon, was upset about the proposed increases; but he said all taxpayers could do is look in the mirror.
“Whatever happens, happens. You have to accept it. We voted these people in,” he said.
Bennett, who recently started as a cook at Mainely Brews, said he could imagine the proposed increases affecting how people spend their money.
“People who come here three or four times a week may only be here once a week or twice a week,” he said. “It’s really going to hurt businesses.”
Other locations that rely on seasonal tourist dollars also are shaking their heads at the proposed hikes. Lauren Lind, owner of North Country Inn Bed and Breakfast in Rangeley, said he expects a 10-to-20 percent drop in business because of the raise.
“People are maxed out. It just raises the totals they have to pay,” Lind said. “If we lowered our price, the effect would be the same price for the customer. It’s almost at the point as to why run a business if you’re not going to make any money?”
While Lind said that he’s fortunate he doesn’t have that many expenses, he thinks some businesses that might be on the margins won’t be able to make it.
“These rural towns — it doesn’t just affect the business owner; it ripples through the economy. The number of guests you have and the number of meals you put out will be felt through the community.”
Jesse Scardina — 861-9239
jscardina@mainetoday.com
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