Chester board hears objections to local option tax, appoints development panel members

By Shawn Cunningham
© 2025 Telegraph Publishing LLC

The Chester Select Board last Wednesday looked at 2026 budgets for Public Works as well as the Water and Sewer departments and appointed four volunteers for a new economic development commission. But the continuing discussion of a 1 percent local option tax on rooms (hotel, inn and short term rental) and meals including alcohol consumed on premises took up the longest portion of its Dec. 17 meeting.

The tax, which would be paid for by each establishment’s patrons, is seen as a way to provide operating funds to the town’s Housing Commission, which is seeking ways to jump-start the construction of affordable housing in Chester. In addition to providing much-needed housing, such development has the potential of increasing the town’s tax base, which would help keep municipal tax rates under control. The board does not have the authority to impose the tax, but it can put it before town voters at Town Meeting in March.

Seeking a local option tax came up last December when the creation of a housing fund was first being discussed.

Prompted by a notice sent by Town Manager Julie Hance to business and STR owners who would be responsible for collecting the proposed tax (in addition to the existing sales taxes) a small number of owners attended the Dec. 3 meeting to express their displeasure with what they saw as a reduction in their incomes.  Some of those who are not in favor of the tax asked that the board delay putting it to a town vote noting that a large number of people would be making a decision that would affect a small number.

Then last Wednesday, Hance presented a thumbnail idea of what the Housing Commission would use the funds for, which had been requested by board member Arianna Knapp. Others members asked what the Economic Development and Cyprus Minerals Funds had as balances. Hance said she didn’t have a number off the top of her head but those are approximately $400,000 and $200,000 respectively. The alternative to the tax could be taking money from either or both of these funds. No vote would be necessary to do that since the Select Board controls those funds.

Several people who were in the room to be interviewed for positions on the new Economic Development Commission weighed in with opinions on the tax including the assertion that the increase in the rooms and meals tax from 9 to 10 percent would make Chester’s hospitality sector less competitive.

“Two digits looks a lot bigger,” said Chester resident Damon Tyler, who said the topic seemed rushed. “It almost feels like the government is try to fill its own vacuum. Unless we’re actually solving a problem that helps the local community and until we can do the work to prove that I’m not that interested in it since it also has the potential to do harm.”

“That’s the purpose of the market study,” replied Hance. The cost of a housing market study is one of the expenses the commission has identified as a use for its funding.

Others agreed with Tyler’s concern, suggesting the increase would hurt Chester’s competitiveness in the area. But currently, the towns that represent local competition for Chester — Londonderry, Manchester, Ludlow,  Springfield and Woodstock —  are among those who already have a 1 percent added sales tax on rooms and meals and alcohol. Some also have the tax extended to general retail, with the exclusion of groceries and most clothing.

On Tuesday, The Telegraph found that most of those towns use the funds as general income to offset the municipal property tax while some have monies earmarked for certain projects or town services.

Manchester assessor Gordon Black says he’s a “huge proponent” of the local option tax, which helps to pay down the property tax while allowing the town to give greater support to organizations like the library and the business association. Saying that it would take hundreds of new houses to increase the grand list enough to raise the $1.5 million in revenue that the local option tax brings in, Black remarked that “you’d be crazy not to do it.”

With the local option tax targeting affordable housing, the alternative idea of finding ways to encourage people to sell vacant or underutilized properties came up. But whentalk turned to using something like eminent domain to take such houses, board chair Lee Gustafson said he didn’t want Chester “to be seen as a place where we take people’s stuff.”

Economic Development Commission takes shape

The town recently sought out residents with specific experience and skills to consider serving on a group to help Chester chart its course in economic development. At last week’s meeting, the Select Board considered five applicants for four positions on the commission. Philip Perlah, Carl Henshaw, Damon Tyler, Julian Sottovia and Brian Santiago applied and were asked by the board to speak of their business experience and vision for growing Chester economically.

The discussions ranged from whether Chester was a “tourist town” to what types of businesses the town needs and how to attract them. After considering the applicants’ answers, the board tapped Perlah, Santiago, Henshaw and Tyler to serve on the commission. Also serving will be Hance, Town Planner Preston Bristow and a representative of Springfield Regional Development Commission which advises the town on development.

During public comment, Kirk MacGinnis – who is suing Chester to have the Class 4 portion of Wyman’s Falls Road that abuts his properties discontinued and turned over to him made another statement that he requested be part of the minutes.

MacGinnis said that his property was conveyed to him with no mention of an easement for the road. He said there was also no mention of the town being allowed to store materials there but that they remain despite his request that the materials be removed. He reiterated his request for the “preservation of the status quo” while the matter “is under judicial review.”

A check of the civil docket calendar for Windsor County does not yet show a date for court proceedings.