Local News

Healey wants to give communities power to raise taxes on lodging, meals, cars

The Municipal Empowerment Act would expand communities’ income sources, Healey says.

Governor Healey delivers her first State of the Commonwealth Address in the House Chambers of the Massachusetts State House last week. Barry Chin/Globe Staff

By Molly Farrar

January 22, 2024

2 minutes to read

Governor Maura Healey filed a bill Monday that would, in part, allow towns and cities to increase taxes on meals and lodging, which is currently capped by state law.

The Municipal Empowerment Act would expand on communities’ income sources, Healey says. It would also put pandemic-era norms such as hybrid town meetings, outdoor dining permits, and to-go cocktails into state law.

The bill gives municipalities the option to increase their hotel, motel, and other rental tax from 6% to 7% (or half a percentage higher for Boston), and their meal tax from the set .75% to 1%. The bill would also let cities and towns increase their motor vehicle excise tax by 5%.

Healey announced the bill last week at the Massachusetts Municipal Association conference, where it received an “enthusiastic response from the local leaders,” the organization said.

“This package reduces red tape that municipal leaders far too often encounter, and gives them more options to utilize tools that will make their communities stronger,” Lt. Gov. Kim Driscoll said.

Other aspects of the bill aim to improve local government operations by updating borrowing rules for school projects and increasing workforce support, through a regional board of assessors and flexibilities in post-retirement employment exemptions.

If passed, the increased taxes would supplement $8.7 billion in local aid in the FY25 budget.

“The administration also recognizes that boosting funding alone is not enough,” Healey wrote to legislators Monday. “Cities and towns across the Commonwealth can benefit from changes to state programs and rules that make it easier for the state and municipalities, together, to best serve our constituents.”

The bill came out of a listening tour last fall when Healey and Driscoll spoke with leaders from more than 100 municipalities. Dozens of town and city leaders voiced their support for the bill.

“I have always felt strongly that putting more into the hands of local government and the community is always a good thing and that’s just what this bill accomplishes,” Malden Mayor Gary Christenson said. “Recognizing that each city or town is unique with differing needs and providing them with the tools and flexibility to decide what works best to address the needs of that community is empowering.”

State lawmakers, who have said previously they won’t raise state taxes this year, “will take a good look at it,” Senate President Karen Spilka told GBH News.