After setting aside the question last year, a divided Board of Selectmen (BOS) voted this week to let Annual Town Meeting (ATM) decide whether to impose a local meals tax on town businesses.

The vote was 3-2 in favor, with selectmen Tim Clark, Marie Sobalvarro, and Lucy Wallace supporting the warrant, and Chairman Ron Ricci and selectman Peter Warren opposed.

The new optional meals tax was approved by the state legislature in 2009 as a way to compensate for Draconian reductions the state has made to local aid. The law lets towns collect a tax of .75 percent on meals sold within its borders. This amount is in addition to the 6.5 percent meals tax businesses already pay the state. The state Department of Revenue estimated last summer that Harvard could have raised $7,659 in the current fiscal year if it had enacted the tax in August 2009. The estimate for the 2011 fiscal year, which begins in July, is roughly $10,000, according to Town Administrator Tim Bragan. If the town votes to enact the tax, the state Department of Revenue (DOR) will collect it on behalf of Harvard and return the proceeds to the town’s general fund.

“Given our budget situation” and the “cutting and cutting we’ve asked the town to do,“ said Wallace, “it’s prudent to give residents an option other than a property tax override as a way to pay for town services.” She noted that the town library needed $14,000 in 2010 to restore Friday openings and meet certification requirements of the Central/Western Massachusetts Automated Resource Sharing Consortium (C/W MARS), which facilitates the exchange of books and other materials between regional libraries.

If Town Meeting voters approve the measure this May, a $1.50 cup of coffee in Harvard will cost an extra penny, and a $16.95 pizza will cost an additional 13 cents. The tax would affect a range of businesses in town, including the General Store, pizza restaurants on Ayer Road, Fruitlands Museum, Dunkin’ Donuts, the Bromfield School cafeteria, and the Westward Orchards Farm stand.

“I just feel it’s wrong to hit the … small businesses in this town,” said Warren, who visited many of them personally last week to solicit their reaction to the proposal. After reading aloud many of the comments he had received, which were uniformly negative, Warren said the selectmen should not support a warrant. “I disagree … totally at this point in time. I would reconsider if neighboring towns were going to be doing it.”

To date no other towns near Harvard have adopted the tax. General Store co-owner Adam Horowitz said that while he “deeply respects the decisions of residents on matters of taxes and revenue,” he worries “that Harvard will be an island of additional taxes among surrounding towns.” He said an extra meals tax also sends a bad message concerning the relative merits of locating a business in Harvard.

BOS Chairman Ricci concurred in his own remarks last night. The choice, he said, was between funding town services, such as interlibrary loans or school athletics, through a property tax override, which spreads the tax more widely, or by collecting it from local business. “We don’t know the impact this will have,” he said, and by discouraging customers who can always go elsewhere, the town could end up collecting less than imagined.

But Sobalvarro, who cast the deciding vote, said she balanced the concern about local business against “listening to Virginia Quarles talking about charging a senior $2 dollars to go to an exercise class.” She said, “I ask myself, what have we come to?”

Though their respective positions were deeply felt, the discussion among the selectmen was civil. Wallace thanked Ricci for allowing the discussion to take place and urged that public hearings be held so town stakeholders had ample time to discuss the pros and cons of the measure. The town will get to decide the issue for itself at ATM in May.