Dedham officials chew over tax plan at mini-Town Meeting

At an otherwise smooth mini-Town Meeting, two Finance Committee members renewed their disagreement about possible hike to hotel and meals taxes, with Derek Moulton questioning how the money would be used if devoted to a major capital facilities stabilization fund.

In response, Selectmen Chairman Michael Butler promised “great understanding and transparency” about how much the town collects from the increased meals tax, and emphasized that Town Meeting would control any allocations to the facilities fund, or spending from it.

Article 3 of special Town Meeting this Monday would, if adopted, create the capital facilities fund, which would be used to pay for new town buildings, or major improvements to existing facilities. Articles 6 and 7 would increase Dedham’s meals tax from 6.25 percent to 7 percent, and its hotel tax from 4 percent to 6 percent.

If the capital facilities fund and at least one of the taxes are approved, then at next spring’s Town Meeting a recommendation would follow from the town administrator to move the new revenue into the fund, Butler said in an interview after Monday’s meeting. Butler proposed last month that the town set aside hotel and meals tax money in the fund as a long-term way to pay for Dedham’s infrastructure.

The town could eventually collect between $548,000 and $1.3 million each year from hotel and meals taxes.

At mini-Town Meeting Monday – held to review the articles coming up at special Town Meeting – Moulton referred to a discussion earlier in the night about a proposal to build a new Avery School, before noting that Dedham is not replacing its fire or police stations or building a senior center.

“This money, if it goes into that stabilization fund, I fully question what it will be used for. And I think as a resident and as a taxpayer, we deserve to know where our money will be going,” Moulton said. “There is a laundry list of needs for the town. Show me the list, and the order that you want to build them, and then maybe I can sign off on them. The conservative in me is opposed to any tax increase, period, however I do fully understand the needs of the town.”

Moulton added that under the new setup, “we could potentially be building a school without ever having to go through a vote” in front of Town Meeting.

Finance Committee Chairman David Martin, who referred to his ongoing disagreement with Moulton on the issue, pointed out that the Legislature finally gave cities and towns the opportunity to raise so-called “local option taxes” this year, as it simultaneously cut local aid. Dedham would lose out if it did not adopt the new taxes, he indicated.

“If anybody in this room believes that next year when budget time rolls around they’re not going to look at each and every single city and town and say who’s adopted it and who hasn’t, then I have some swampland in Florida I’d love to sell to you,” he said.

Martin said there is clearly no consensus on what to do with the money, and that a capital improvement has not been defined, but he had faith the leading boards in town could agree “on what the policies should be for expenditures of money out of this fund, and then present those to Town Meeting for their approval.”

Butler said as the state reimburses Dedham for the increased meals tax every quarter, “Town Meeting members would know to the penny how much of that incremental three-quarters of a percent is coming into the coffers of the town.”

A two-thirds vote by Town Meeting is needed to move any money into or out of a stabilization fund, Butler said Tuesday.

The Board of Selectmen’s upcoming review and update of the town’s financial policies – in conjunction with the School Committee and Finance Committee – will likely include the new stabilization fund, he said.

Responding to Moulton’s fire, police, and senior center comments, Selectman Carmen DelloIacono argued, “This will drive these projects in the future. This is a way of taking off the backs of the taxpayers and residents of the town, and actually dedicating a fund to make sure these projects get done in the future.”

Many customers paying restaurant bills here are transients and not Dedham residents, he added.

The selectmen have supported both new tax increases, while the Finance Committee voted 6-3 in favor of the hotel tax, but 6-3 against the meals tax. A majority of FinCom members were concerned the meals tax would impact local residents more directly than the hotel tax would, according to Martin.

Another Town Meeting member also suggested Monday night that the capital facilities stabilization fund be postponed until the May meeting, so it is clear, when the account is set up, what its earmarks are.

Dedham Transcript staff writer Edward B. Colby can be reached at 781-433-8336 or ecolby@cnc.com.