City leaders in Newark have voted down two proposed tax measures aimed at boosting revenue, citing concerns from residents and local businesses.
Two tax proposals fail to pass
During an April 27 meeting, the Newark City Council rejected resolutions that would have allowed:
- A retail alcohol tax of up to 3% on carry-out sales
- An increase in hotel lodging tax from 3% to 5%
Both proposals needed at least six votes to move forward but fell short after multiple council members voted against them.
Alcohol tax faces strong opposition
The proposed alcohol tax was intended to generate an estimated $150,000 to $300,000 annually. However, liquor store operators, distributors, and residents pushed back, arguing it would drive customers outside city limits.
Critics also said the tax unfairly targeted retail alcohol purchases while excluding bars and restaurants.
Lodging tax concerns over competitiveness
The lodging tax increase also failed after receiving only five supporting votes. Opponents warned that higher hotel taxes could put Newark at a disadvantage compared to nearby areas, potentially reducing bookings and impacting local jobs.
Supporters, however, argued that visitors—especially those coming for events at the University of Delaware—should contribute more to city infrastructure costs.
Budget pressure remains
City officials say the proposals were part of efforts to address rising costs, particularly for public safety and policing, without increasing property taxes or utility rates.
Mayor Travis McDermott warned that the city could face a difficult budget season ahead and expressed frustration over the lack of revenue options.
What happens next?
Although the measures were rejected, city leaders will still need to explore alternative ways to balance the budget—either through spending cuts, new revenue ideas, or potential increases elsewhere.
Key takeaway
Newark officials are under growing financial pressure, but concerns about business impact and competitiveness led council members to block new alcohol and lodging taxes—for now.