The Salem City Council voted on Thursday, May 28 to ask the Legislature for permission to raise the city’s lodging tax and its short-term rental fee, with the extra money reserved for school and municipal buildings. Both home rule petitions from Mayor Dominick Pangallo passed 10 to 0; Councillor-at-Large Ty Hapworth recused himself from both votes.
The first petition would let Salem impose a local room occupancy excise of up to 8.75 percent on hotels, motels, bed and breakfasts and lodging houses, above the 6 percent cap in state law. The second would raise the community impact fee on professionally managed and owner-adjacent short-term rentals from 3 percent to as much as 6 percent. In both cases the revenue from the increase must go into a special fund and can be spent only on planning, building, renovating, equipping and maintaining school and municipal buildings, including debt service.
The council created that fund the same night, voting 11 to 0 to establish a School and Municipal Building Stabilization Fund under Chapter 40, Section 5B. Together the three votes set up a financing path for the city’s building program while the new high school project moves through the Massachusetts School Building Authority process.
Medicare for All
A resolution by Ward 5 Councillor Lydia King supporting House Bill 1405 and Senate Bill 860, An Act Establishing Medicare for All in Massachusetts, passed 11 to 0. The resolution says Salem is projected to spend more than $21 million on medical insurance for city and school employees and retirees in fiscal 2027, an 8.2 percent increase, that about 3 percent of Salem residents are uninsured, and that under the bill’s payroll tax the city would have saved more than $8 million in fiscal 2024. King said she ran the numbers for the current year and the savings would be $11.3 million. The bill, she said, covers dental, hearing, vision, mental health and long-term care that original Medicare does not.
Project labor agreements
Ward 2 Councillor Andrew Smith won approval of an order sending to committee an ordinance that would require project labor agreements on public construction projects over $10 million. Smith said the high school building committee had declined to adopt one and “got a lot of flak” for it, and that the decision belongs with the council. Councillor-at-Large Kyle Davis said the North Shore Labor Council had shown that agreements do not add cost and keep projects on schedule. King noted that the governor now requires them on state projects over $30 million. Ward 4 Councillor Timothy Flynn said the absence of an agreement on the high school “was a mistake.”
Also at the meeting
- $124,943.40 was appropriated from the Transportation Enhancement Fund to keep the Salem Skipper on-demand rideshare service running through the end of August.
- Retirees of the Salem Contributory Retirement System will see the base for their cost-of-living adjustment rise from $15,000 to $20,000 effective July 1, 2026, on a 9 to 0 vote with Flynn and Councillor-at-Large Conrad Prosniewski recused.
- A resolution by Hapworth supporting South Essex Sewerage District legislation, including a $390 million cost limit for its Centennial Plan and an exemption from Proposition 2 1/2 for that work, was referred to the Committee of the Whole.
- Resident permit parking changes for Essex Street received first passage as amended, along with other traffic ordinances on tow zones and stop signs, and the council accepted a bronze sculpture valued at $6,400.
- Jay Carroll’s appointment as city engineer and Victor Hernandez’s appointments to the Beautification Committee and Zero Waste Salem were confirmed.
The minutes are here.
