Food and beverage tax born again

For the past four months, state representatives have been proposing food and beverage tax bills that have failed to reach a vote, forcing many to believe the effort was a wash. However, Bloomington representatives have continued the revival attempts and are beginning to see results. \nState representatives are debating legislation that would allow Bloomington and Monroe county officials to enact a 1 percent add-on tax to all prepared food and beverages. The state legislature has been considering this add-on tax, now called Senate Bill 329, in some form or another since January. \nThe current proposal would give Monroe, Henry and Wayne counties, along with the city of Avon, the authority to raise sales tax on prepared food and beverages from its current rate of 6 to 7 percent. If Senate Bill 329 passes -- pending local legislation -- restaurants, bars, hotels and even grocery stores will be subject to the tax. \nBloomington and Monroe county officials have been searching for ways to raise money through food and beverages since the beginning of the new year. State Rep. Peggy Welch (D-Bloomington) made the first proposal Jan. 11. The bill was up for vote March 1, but House Democrats refused to enter chambers, deflating hopes for the food and beverage tax along with more than 100 other bills. \nThe bill since has been amended and was voted out of the House Ways and Means committee and onto the floor March 23. \nSenate Bill 329 calls for an estimated $2.2 to $2.5 million in potential revenue to be spent at the discretion of locally elected officials, but most of the money has been ear-marked within the legislation to develop a juvenile justice center and expand Bloomington's downtown convention center. \nJeff Mease, founder and CEO of One World Enterprises, which operates Bloomington's Pizza Express and Lennie's, has been vocal in his opposition to the bill. \n"The bottom line is that this tax is a special tax on one industry -- ours," Mease said. "Yet the money spent will be on projects that benefit a far wider range than just the restaurant industry."\nMease said he believes Bloomington thrives on its unique arts and culinary community, and he thinks this kind of legislation will discourage local restaurant start-ups. \nJohn Livengood, spokesperson for the Restaurant and Hospitality Association of Indiana, agrees with Mease. He said he believes the legislation would place an unfair burden on not only restaurants but also patrons.\nLivengood said the extra financial burden will fall heavily on the working class, the elderly and the poor, especially as he believes eating out has become the norm rather than the exception.\n"A more general tax is always preferable," Livengood said. \nSenator Vi Simpson (D-Bloomington) said she could understand how restaurant owners might feel they are being targeted, but she said she believes the positives would outweigh any negative effects accompanying the bill. \n"They're right -- they are being singled out," Simpson said. \nThere are already food-related sales taxes in Bloomington, and Simpson said she believes revenues from the tax increase could bring new money to the Bloomington economy, specifically in the tourism industry. New investment in these industries would benefit the Bloomington economy as a whole, and hotels and restaurants also could see increased revenues, she said.\n"I have great confidence that when the food and beverage tax is enacted, local officials will spend the funds in the right way," Simpson said. "And if they don't, I'm sure the voters will tell them." \nSimpson stated she always has supported fiscal autonomy, and this is another instance of the state legislature granting fiscal autonomy to local governmental authority.\n-- Contact Staff Writer Patrick Giese at pgiese@indiana.edu.