Laconia lobbying for more meals and room rax revenue

In an effort to defray the cost of Motorcycle Week, the City Council has renewed its efforts to persuade the state to increase the city's share of the proceeds of the state's meals and rooms tax. It may be a tough sell, however, because the Lakes Region as a whole is said to generate well less than 15-percent of taxable annual sales.

This week City Manager Eileen Cabanel told the councilors that although officials of the New Hampshire Department of Revenue Administration had offered to discuss the issue, they emphasized that any change in the distribution of the revenue would require an act of the Legislature.

The Legislature overhauled the distribution of revenue from the meals and rooms tax in 1993 with aim of ultimately distributing 40-percent of the proceeds to municipalities based on their share of the state's population. Beginning in 1995, municipalities received 75-percent of what they had received in the past plus 75-percent of the annual increase in revenue from the tax. Every year after, municipalities were to receive the prior year's amount plus three-quarters of the increase until the total distribution reached 40-percent.

Among state taxes, only the business profits tax and business enterprise tax generate more revenue than the meals and rooms tax. In 2006, tax receipts totaled nearly $200-million and are projected to approach $210-million in 2007. In 2006, $47.1-million in proceeds was distributed to municipalities, of which Laconia received $610,931.

A recent report by the New Hampshire Center for Public Policy Studies found that businesses in the Merrimack River valley (Concord-Manchester-Nashua) accounted for more than a third of all meals and rooms sales, with gross sales receipts of $510-million in 2004. Receipts in the Seacoast and White Mountains totaled $256-million and $210-million respectively while sales in the Lakes Region were $180-million.

Laconia's share of the distribution can only be increased at the expense of other municipalities, some of which have much larger populations and consequently more representation in the Legislature.