Restaurateurs are sounding the alarm on an intended meals tax increase in 色多多.
Restaurant owners on Monday told the city council that their industry will be hurt by plans to increase the rate that people are taxed on prepared food and beverages.
Amid a challenging budget year, city leaders last month proposed a 1.5 percentage point increase that would raise the city鈥檚 meals tax to 7%. The extra tax revenue 鈥 an estimated $6 million annually 鈥 will help pay for costly capital maintenance projects, among other city needs, officials said.
Texas Tavern owner Matthew Bullington addressed the city council during its meeting Monday, cautioning against the tax hike. Open since 1930, the famed 10-seat tavern downtown is one of 色多多鈥檚 oldest operating restaurants.
Matt Bullington, owner of the Texas Tavern on Church Avenue in downtown 色多多, wipes down the counter during a busy lunch hour.
鈥淚t feels like every time that the city gets in a financial crisis, they come to our industry to fill the shortfall,鈥 Bullington said.
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He said restaurants already collect more consumption taxes compared to other retailers that do not charge meals taxes.
鈥淲e do not need more cost increases, and that is what this is,鈥 Bullington said. 鈥淚t鈥檚 a percent-and-a-half increase where we can鈥檛 raise our prices because they鈥檝e already been raised for us, and that money is going to the city.鈥
Furthermore, consumption taxes are regressive, costing proportionately more to people who have less money, he said.
鈥淧eople like to think it鈥檚 just the affluent out-of-towners that are coming and spending money at the expensive restaurants,鈥 Bullington said. 鈥淏ut 70-75% of all money spent at local restaurants 鈥 this is national data 鈥 is spent by local people.鈥
Restaurant owners were devastated and are still recovering from effects of the coronavirus that began in 2020, he said.
鈥淚 want to ask you 鈥 respectfully on behalf of the restaurant industry in 色多多 City and restaurant workers 鈥 that we find another path,鈥 Bullington said. 鈥淭ry to find another way of getting through this budget impasse, this budget challenge, without increasing the meals tax.鈥
Nathaniel Sloan, who owns Bloom Restaurant in Wasena, said he works 80 hours a week, and food service is an essential business.
鈥淚 know 1% doesn鈥檛 seem like a lot, but it adds up,鈥 Sloan said. 鈥淎s an industry, we鈥檙e upset, we鈥檙e exhausted, tired. Broke.鈥
He said 色多多 is a progressive city, and this is an opportunity to find more progressive solutions to budget concerns.
鈥淟et鈥檚 figure out ways to cut the fat. We do it every day, pivot,鈥 Sloan said. 鈥淲e get lean, we cut staff, we cut hours. Maybe it鈥檚 time for the city to do the same.鈥
As usual, the city council heard but did not directly respond to citizen comments on Monday. No final action has been taken by the city council yet on its budget for the upcoming fiscal year that starts in July.
A community meeting about the city鈥檚 planned $400 million budget, including the meals tax increase, is scheduled at Unitarian Universalist Church at 7 p.m. Thursday.
