Coincidence? Meals tax revenue rose in Northampton, Easthampton after pot stores opened

  • Diners eat Wednesday outside Mama Iguana's in Northampton. Officials say meals tax revenues increased in Northampton and Easthampton after legal sales of recreational marijuana began in those communities. STAFF PHOTO/JERREY ROBERTS

  • Diners eat outside Mama Iguana's in Northampton, Wednesday, July 10, 2019. Officials say meals tax revenues increased in Northampton and Easthampton after legal sales of recreational marijuana began in those communities. —STAFF PHOTO/JERREY ROBERTS

  • Amanouz Cafe is seen Wednesday in Northampton. Easthampton has also seen a jump recently in meals tax revenues. STAFF PHOTO/JERREY ROBERTS

  • Amanouz Cafe in Northampton, Wednesday, July 10, 2019. Officials say meals tax revenues increased in Northampton and Easthampton after legal sales of recreational marijuana began in those communities. —STAFF PHOTO/JERREY ROBERTS

Staff Writer
Published: 7/11/2019 12:10:27 AM

NORTHAMPTON — Could legal sales of recreational marijuana have sparked a run on restaurant food?

Officials can’t say for sure, but meals tax revenues increased in Northampton and Easthampton after sales of recreational marijuana began in those communities.

New England Treatment Access in Northampton began selling recreational marijuana on Nov. 20, while INSA began selling recreational marijuana in Easthampton on Dec. 22.

In Northampton, the meals tax revenue for the city in November, December and January was $187,976, up from $171,421 in those three months during the previous fiscal year, an increase of about 9.7 percent.

The city received $184,136 in meals tax revenues from February, March and April, up from $175,766 the previous fiscal year, an increase of about 4.8 percent.

Both of these numbers are high-water marks for these quarters. The previous high for November through January was $173,353, which occurred in fiscal 2016, while the previous high for February through April was the $175,766 last year.

Under state law, cities and towns can add a local option meals tax of three-quarters of a percent on a restaurant bill, in addition to the 6.25 percent state meals tax. 

Terry Masterson, North-ampton’s economic development director, said while he didn’t know whether the revenue rise was attributable to the sale of recreational marijuana in the city, he did say that the increase “coincides with the opening of the dispensary.”

He also said that the spike comes at a time when some believe that MGM Springfield might depress consumer spending in the city.

As for whether he thought meals tax revenues might continue to increase in future post-recreational marijuana sales quarters, Masterson said, “We will see.”

In Easthampton, meals tax revenue for the city for November, December and January was $57,882 for fiscal 2019, up from $47,111 the previous fiscal year. That’s a more than a $10,000 increase, or a 22.9 percent rise. The figure is also a high-water mark for meals tax income for Easthampton for that quarter. 

The previous biggest increase for the quarter in Easthampton was the increase from $32,888 in revenue in fiscal 2014 to $40,952 in fiscal 2015, an increase of more than $8,000 or 24.5 percent.

“I don’t really know what’s behind it,” said Valerie Bernier, the auditor for Easthampton, who speculated price increases on meals or the opening of restaurants could be responsible.

Mayor Nicole LaChapelle said she believes that the opening and expansion of restaurants in the city is the main driver behind the revenue increase, although she said some of it may have been from INSA.

“That bump has much more to do with the buzz about Easthampton as a whole,” she said.

By contrast to the robust increase in the previous quarter, the payment for February, March and April was $58,438, only slightly ahead of the last fiscal year’s payment of $57,044, a 2.4 percent increase. It’s also short of the high-water mark for that quarter in Easthampton, set in fiscal 2017 at $62,793.

Bera Dunau can be reached at bdunau@gazettenet.com.

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