Voters -- and the Durham Committee -- the next stop for the civic/cultural prepared foods tax

After a long week of legislative machinations and parliamentary procedures led by state Sen. Floyd "Here on Geer" McKissick Jr., the General Assembly completed the passage of the proposed 1% prepared foods tax yesterday by a 22-19 vote.

This sets the stage for a November referendum in which Durham voters will have the chance to approve or turn back the sales tax, the proceeds of which are largely earmarked to fund civic and cultural amenities such as the Civic Center, Carolina Theatre -- and the proposed Durham history museum and Minor League Baseball fan experience/museum center.

So where does this issue go from here? Barry hit the nail on the head in terms of the key issue at stake for its passage:

Here's where it gets interesting. By all accounts, Sen. Floyd McKissick did the heavy lifting getting this bill through the Senate. What happens next when the Durham Committee on the Affairs of Black People opposes it in the fall?

The referendum, after all, comes at a point where the Committee is enjoying a timely bit of political power, driven largely by the tremendous voter turnout in the black community for Sen. Barack Obama's historic presidential bid. That turnout appeared to make a key difference in leading Joe Bowser to a seat on the Durham County Commission and in forcing a run-off between usual also-ran Jonathan Alston and Leigh Bordley for the open school board seat.

And the Committee has certainly been willing to use that power. (A persistent and well-sourced rumor holds that the Committee held court with at least one elected official four days between the contentious budget vote, presenting data that suggested Durham's AAA bond rating would not be at risk even if the City Council backed Mayor Bill Bell's 54-cent property tax rate line in the sand.)

Which is where things get interesting for Bell, who's been one of the leading champions of this tax initiative.

It will be interesting to watch the Bell-Committee interactions over the next few months. Opposition to the tax by the Committee, assuming the PAC can get out the word to its members as it did with this spring's mailing, would almost certainly doom the referendum to failure, given the massive general election turnout expected. Conversely, DCABP support would likely give a big boost to passage.

Which may explain some of Bell's towing the line on issues important to the PAC, including the stern opposition to backing away from the proposed Walltown pool, with the mayor's recent indoor-outdoor compromise proposal a shrewd way of walking the line on a difficult issue. Look for more such maneuvers in the months to come, we expect.

Still, there are good reasons to believe that the tax might get the Committee endorsement. Despite DCABP chair Lavonia Allison's fervent opposition to property taxes, the prepared meals tax is expected to pull 40% of its funding from out-of-county visitors and commuters.

The latter is a long-time sticking point for local black leaders, who've rightly been concerned at the challenges of getting the 50,000 or so people who commute into RTP and Durham each day to contribute to Durham's coffers.

Additionally, as many have pointed out, the tax is low enough as to be likely to have its real impact on those with the economic good fortune to be able to afford to eat out frequently, making it more progressive than your typical sales tax. (Though, hearkening back to another good point Barry made recently, it'd be nice to see a drop in the 2% local sales tax on groceries if we want to look at a real progressive/regressive issue.)

All that said, the one thing you can predict with the Allison-led Committee is that you can't really predict the outcome. Which is why you can expect Bell to put on his best dancing footwear in the coming months, trying to soft-shoe his way through a political minefield.

Comments

[barry]

Kevin - Dr. Allison made it quite clear at a recent Democratic Party meeting that the DCABP will be opposing this tax in the fall.

The issue will be, i think, a physical one of making sure that people actually know where it is on the ballot so they can vote on it. Presidential year elections make for some strange ballot constructions in NC.

I'll have more on this at my place later today.

[eah919]

Question: Isn't a prepared-food tax considered a progressive tax? I.e., it 'targets' a 'luxury good' which is disproportionately consumed by higher-disposable income folks (and is consumed even more disproportionately by out-of-town businesspeople and tourists), while funding public goods. What is DCABP's concern with this?

[barry]

There are a good many people making the argument that lower income members of the community eat a disproportionate number of their meals at cheap, fast food restaurants. A commenter at my place cited a newspaper report showing that it's cheaper, and more time efficient, to purchase fast food meals than it is to go to the grocery store and buy and prepare staples, for low income people who may be working more than one job to make ends meet.

[cw]

"Question: Isn't a prepared-food tax considered a progressive tax? I.e., it 'targets' a 'luxury good' which is disproportionately consumed by higher-disposable income folks (and is consumed even more disproportionately by out-of-town businesspeople and tourists), while funding public goods. What is DCABP's concern with this?"

I have some trouble conceiving of the Minor League Baseball Fan Experience Museum as a "public good." I'm all for giving money to a landmark building such as the Carolina Theater, but a minor league baseball museum? Should citizens be forced to fund that sort of venture? I fail to see how something like that would be a boon for the local community; rather, a "fan experience" museum should derive funding from private initiatives rather than public taxes.

[Joshua Allen]

Some of us eat out because we work hard every day and don't have time or energy to cook when we get home. While some may view eating out as a luxury I view it as a way I choose to spend my time and money. I don't understand why I should penalized because of how I choose to spend my money. Maybe we should tax people who attend baseball games since they are more likely to use such a museum.

I'd be more likely to support the food tax if it were for something more general purpose than a MLB museum... something that is appealing to more members of the general public. I agree with the last post by "cw" that the baseball museum is something that should derive more from private initiatives than public taxes.

[Todd]

The idea that this will cost the average Durhamite $20 per year is curious. That implies $2,000 per year in spending on 'prepared' foods - or $38.46 per week.

For a family of 4, that's a little more than one meal out a week for anything other than fast food. Or 5 $7.50 lunches by yourself and no meals out - or Pizza - for the kids.

[Mike Woodard]

The proposed Minor League Baseball Fan Experience and Museum is just one of many projects that the sales tax revenue could support. I'm on vacation, so I don't have the full list, but from memory I recall the Carolina Theatre, Hayti Heritage Center, the Civic Center, and numerous other capital projects. The City Council and County Commissioners also proposed including various health, education, and "general purpose" programs in the list of proposed projects. I'll post more when I return next week.

[Michael Bacon]

Todd,

If it's the "average Durhamite," that means it's $38.46 per week per person, not per household. Which means for your family of four, that would alot them around $150 per week for eating out. That doesn't seem that far off, considering that it's a very crude unweighted average across every man, woman, and child in the city.

[Todd]

Michael - Thanks for the clarification. $150 a week is a bit high, but a lot closer to reality than $38.

Wake County has used their meals tax to fund, among other things, the RBC Center and the soon to be open Convention Center. Those buildings clearly promote tourism and bring in dollars from outside the area.

Durham's list, on the other hand, includes some questionable items - in particular County Stadium and the Civic Center. Both have been perpetual money losers requiring annual infusions of more tax dollars. County Stadium is little more than a football staduim for Northern HS, and the Civic Center is really just ballrooms for the Marriott hotel. Neither deserve to be on the list compared to other needs in our community.

No money should be spent on a high school football stadium as long as there are 130 trailers in use as classrooms by DPS across Durham County. And if money is to be spent on a convention center in Durham, it should be on a new state-of-the-art one - not the Marriott ballrooms.

[Ellen Reckhow]

Actually, there are over 80,000 commuters (about half of our labor force) who come from other counties and work in Durham. If they eat lunch in Durham, they will be contributing to this revenue.
While the Minor League Baseball Fan Experience and Civic Center are getting much of the publicity, there are many other projects. Possible projects amount to over $170 million. They include the Museum of Life and Science, Durham Arts Council, Hayti Heritage Center, Durham Central Park, Leigh Farm Park, an environmental education center, and a number of greenway trail and open space projects.

[Barry]

Ellen - it's my understanding that there will be an "aggressive" campaign mounted against passing this tax, including from the Durham Committee. My recollection from the discussion of the potential land transfer tax initiative last year was that elected officials were prohibited from explicitly advocating in favor of passing a referendum that would increase taxes. Ami remembering correctly? And if so, how will our elected officials, who seem to be pretty much in favor of this tax, work to ensure its passage?

[Ellen Reckhow]

Barry,
The County cannot advocate -- we can only educate. Typically, we form a steering committee to raise private money and advocate for the issue. We plan to do it again.

[TT]

Using this revenue to support greenway and open space projects is brilliant. Such improvements will certainly add value to Durham's cultural assets and businesses. Alternative transportation options will contribute substantially to our future economic stability, by offsetting the VMT costs to visitors and our local workforce. Kudos is deserved to Ellen and others for seeing the potential for this proposed tax to be a win-win for our local environment and economy.