Letter to the Editor: Maybe It’s Time for Meals Tax Increase

by | Jun 7, 2018

By Dan Speca

There has been much ado made recently by the Town Council, sometimes with great vehemence, that East Greenwich has “a spending problem.” Although this may be true – and I don’t think anyone would object to sound measures in cost savings for the town – School Committee President Carolyn Mark summed it up most accurately the other evening when she stated that we don’t have a spending problem, but rather we have a REVENUE problem.

We can debate and suggest for hours the best ways to raise revenue for our small town, including enticing larger corporations, seeking out grants, and upping the ante with New England Tech. I expect our Town Councilors (present and future) to be both creative and innovative in helping the town grow its revenue base, offsetting the heavily tilted burden on property taxes. But there are other ways right in front of us.

One revenue generator that was discussed at the June 4 Town Council meeting was raising the local meals & beverage tax. As it stands now, East Greenwich benefits substantially from the 1 percent levy on diners, climbing from just shy of $500,000 in 2013 to nearly $750,000 in 2018. East Greenwich has a become a dining destination – one of the top three in the state (Providence and Newport being the others) – a destination that only continues to improve year-over-year with new and more dynamic options. The dining scene in this town is a significant contributor, both socially and financially.

So what would happen if we were to raise the levy an additional 1 percent, adding a potential $750,000 in revenue to our budget? There is a general concern that a hike in the levy might turn patrons away, thus affecting the bottom line of our restaurants and bars. Business would suffer, resulting in the potential of employees being cut.

But is that realistic?

On a $10 order at Panera or McDonald’s, that’s an additional 10¢.
On a $100 check at Fresco or La Masseria, that’s $1.

These are not significant increases to a bill, and the consumer mentality is generally to disregard fees and ancillary costs when making purchases. Airline taxes are typically equal to the actual fare price. We may gripe, but we pay. Our cellphone bills also contain a number of fees and taxes. Again, we may gripe, but we pay. In other states, people pay bottle deposits and often do not claim the deposit back. When the 1 percent meal tax was instituted several years ago, people complained then that it was going to kill restaurants, but it didn’t. We have become blind to the fees we pay, considering them just another cost of consumption.

As the current president of the Greenwich Odeum, I will share that, not long ago, our board debated raising ticket fees as a way to generate more revenue, primarily because we are growing, we are hiring employees, and we want to make continued improvements. Not dissimilar in ways to what the town is facing. We considered the idea that people may object, resulting in fewer patrons, as did we consider the notion that people will pay fees regardless of whether they exist or not.

Suffice it to say that after studying the fee structures of other theaters and venues in Rhode Island, Connecticut and Massachusetts, we raised our fees. They are still comparatively very low, people are still buying tickets, we have taken on more employees, and we have continued to improve the patron experience at the theater. We did not skip a beat.

In the end, we’re not talking about slapping a prohibitive number onto a dining experience. We’re talking about a very, very small unnoticeable amount added to a check. It’s an amount that can benefit our town greatly.

Dan Speca lives in East Greenwich.

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4 Comments

  1. Eugene Quinn

    We do indeed have a revenue problem, largely self-inflicted through the council’s intransigence with regard to even the smallest tax increases. Based on the numbers presented by the tax assessor, you can estimate the effect of funding a librarian for the high school, which would require a 4 cent increase in the property tax rate. The increase in the tax bill for a home at the median ($417,000) valuation would be $16.68. A home valued at $1 million would pay $40 more.

    Reply
  2. Yaohua Zhang

    East Greenwich School District should utilize the state offered free Dual Enrollment Program and Advanced Course Network as many other RI school districts have done vs building a resistance wall by claiming it has the impact on unpopular teachers. It does not make sense to me why the taxpayers have to foot the bills for the unpopular teachers and the taxpayers have to pay to replicate the same education programs state has offered free.

    Reply
  3. Camille Speca

    I am biased, of course, but it’s refreshing to hear someone try to be innovative and problem solve in a logical, non partisan way. We can *all* work together to generate more capital for our town, and, as Dan said, sometimes the solution is right under our noses.

    Reply
  4. Dean Fachon

    The Town Council should be thanked, not berated, for recognizing that EG absolutely does have a spending problem! A small increase in taxes that are already too high is no solution.

    We should have done better in our past contract negotiations; we should not have built such an extravagant middle school; and we certainly should not have followed that right up with a new police station. If we were not paying 10% of our budget to finance debt, we would be in a better place. Still not as thrifty as Barrington, for instance, but better.

    Is there a way for EG to accelerate the pay-down of its debt and reduce financing fees without raising property taxes?

    Reply

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