Hingham Leaders Explore New Taxes and Fees As Town Faces Higher Costs and Lower Revenue
By Greg Lane, June 15, 2020, Updated June 16 at 10:00 PM
Last year Hingham Town Meeting approved a $103.38M budget, but Hingham is on track to end Fiscal Year 2020 ("FY20") with a deficit as a result of losses in meals tax revenue, fees and other revenue sources due to COVID-19.
Despite the significant uncertainty about how long the pandemic and the economic impacts of the public health crisis will last, one thing is clear: Hingham, like towns and cities across Massachusetts, will see a significant downturn in 2021. From the cancellation of recreation and education department programs to plummeting spending at restaurants, the town is burdened with mounting financial insecurity.
According to the National League of Cities, the combination of unexpected COVID-related expenses and an anticipated decline in revenue is already resulting in a 20-30% loss of income for municipalities across Massachusetts, and there is significant uncertainty about how long the economic impacts of this public health crisis will last. At the same time, Massachusetts is likely to cut aid to local governments in order to alleviate the State’s own budgetary pressures.
On the heels of a lengthy discussion about a brand new set of costs that are not currently accounted for in the Selectmen’s Fiscal Year 2021 (“FY21”) budget, the Advisory Committee discussed ways the town might increase or find new sources of revenue at its meeting on Thursday night.
“As you’re all aware, each year it gets harder to balance the budget and even harder to add new initiatives as revenue growth has slowed,” explained Advisory Committee Chair Victor Baltera. “And I really want people to start thinking about ways the town can increase or find other sources of revenue, of course recognizing the impact that the pandemic puts a whole new light on things.”
The Committee discussed adopting a tax increase but are conscious that it would only add to the tax burden on residents. Since Hingham is close to its 2.5% increase ceiling each year, the Town can only exceed the limit established by Proposition 2-1/2, also known as an "operational override," through a majority vote in a municipal referendum, or ballot.
Baltera acknowledged a tax increase is never welcome, but noted that some towns utilize them regularly. “It may not be a good time for (an operational override)," he said, "but that may be in our future.”
Advisory Committee Vice Chair Bob Curley suggested that the town look into bringing in marijuana retailers. He explained that communities that host recreational pot shops stand to earn new revenue. Curley pointed out that a retail marijuana establishment will be coming to Rockland, near the Hingham town line, and expressed concern about “missing out” on those revenues.
“We have business development opportunities in South Hingham, close to the route 3 corridor which might be a natural place for a retail marijuana business,” said Curley. Committee Member Evan Sheehan enthusiastically supported the idea. “Bring it on,” he said. In 2018, Hingham Town Meeting approved a Warrant Article which banned retail recreational marijuana shops.
The Committee also discussed potential revenue from anticipated development in South Hingham which includes the section of Whiting Street (Route 53) from the intersection of Derby Street and Gardner Street to the Hingham/Weymouth town line. According to the South Hingham Study Group which met from 2013 to 2017, the area consists of approximately 900 acres with significant tracts presently available for commercial and industrial development or redevelopment.
“Hotels may become part of the South Hingham development,” said Curley, “so to have a tax in place at the time of the development would be a good thing.”
The Committee plans to meet one more time before taking a break during the month of July. The hope is that the discussion will prove helpful to a new task force that is being created by Selectman Mary Power.