Newark City Council tasked City Manager Tom Coleman with finding new revenue streams ahead of Fiscal Year 27.
So far, they’ve rejected the options he offered. Coleman asked Council to revisit three proposals– two of which they voted down – now that Council has new members.
Those options are raising the maximum lodging tax, creating a tax on retail alcohol sales and levying a tax on gross rent or lease payments.
Councilmember Corinth Ford said she published two of the three options in her newsletter to get feedback from residents.
“Overwhelmingly, my constituents want this,” Ford said. “People feel that there have to be other revenue streams besides raising property taxes. That's one thing. The other thing is that the arguments that I've heard against it [are] from the hotel industry itself. A comment was made that they don't use the infrastructure of the city. That's not true.”
Several Councilmembers concurred, saying an increased lodging tax is fair. Councilmembers appeared amenable to both raising the maximum lodging tax and levying a tax on retail alcohol sales.
The most lucrative proposal – levying a tax on gross rental or lease payments – was tabled while Councilmembers discuss the effort with state legislators.
That option could bring in $1.5 million per percent taxed, according to Coleman.
“The proposal as outlined in the resolution was for 3%, but that wasn't necessarily because we thought 3% was the number we should go with,” Coleman explained. “It was more a function of the Freedom of Information Act requirements where Council can amend down on the floor, but they cannot amend up on the floor.”
If Council moves forward with implementing a tax on rent payments, Councilmembers say they would want to see exceptions for low-income families.
Coleman added that tax would also call for a new full-time position to city staff to handle the administrative work.
Councilmembers will vote on raising the maximum lodging tax and instating a retail alcohol sales tax at the April 27 meeting.
