Prepared foods tax: Who's backing the backers?

We've all talked extensively about the Raleigh-based opposition to the prepared foods tax on this fall's ballot, with Dallas Woodhouse of the conservative-backed "Americans for Prosperity" providing financial backing and leadership for the effort, in conjunction with Lavonia Allison's political machine.

A less-discussed item: just where is the financial support for the pro-food tax effort coming from?

The short answer is, an amalgamation of Durham's business, design, corporate and downtown elite, bringing resources together in an interesting cross-section of City Hall influencers.

Media reports have pegged the financial resources of the "A Taste for Durham's Future" committee at nearly $45,000. We'll learn more about just where those funds are coming from this week, when third-quarter reports are due (the filing deadline is the 27th.)

Still, some details are already available, thanks to the $19,150 in filings already disclosed through the organization's 48-hour reports, required to capture contributions of $1,000 or more within 48 hours of the contribution.

The committee -- formally the "Durham Prepared Meals Tax Committee," with offices down in RTP -- filed organizational documents on August 19, with co-chair Rob Teer Jr. taking on the treasurer role.

And Teer appears to have been a busy bee, with four large contributions to date received on a pass-through basis from the Durham Chamber of Commerce, whose Legacy Foundation has bundled and forwarded these distinct contribution combinations since September 19.

The biggest individual contributors to date: a tie between Teer's own development firm, Teer Associates, and everyone's Raleigh friends, Capital Broadcasting Corp. Each firm has given at least $5,000 to the effort, based on this filing.

CBC's interest? Besides being a major stakeholder in downtown, Capitol also owns the Durham Bulls minor league baseball team. Given that a minor league baseball museum is one of the projects proposed to be funded from the tax, it's fairly easy to imagine both civic-good and self-interested rationales for Jim Goodmon's team to open up the wallet for the cause.

Also prominent in the giving: a number of the property owners who are stakeholders in the DAP district where the minor league baseball museum would likely be built, including--

• Hank Scherich, CEO of Measurement Inc., who's assembled a wide range of properties along Morris St. for what's expected to be a major mixed-use development, gave $2,000;
• Stone Bros. & Byrd, owned by George Davis -- whose property across from the DAP is strategically located in a way to be a likely linchpin in any future development plans -- gave $500;
• Acme Plumbing on Foster St., owned by the Tilley family (also players in the so-called DAPAPA collaborative of local landowners), gave $300.

Another major set of givers in these bundled contributions is comprised of significant players in the Durham development picture. The Freelon Group, who've provided architectural services for a number of city and county government projects (including the new multimodal transit station and the forthcoming county human services building) donated $1,000; so did CT Wilson Construction, law firm K&L Gates LLP, RBC Bank, and architectural/design firm OBrienAtkins, whose clients have included NCCU and meals tax beneficiary the Museum of Life & Science.

Rounding out the team with smaller-dollar contributions: former cultural master plan committee chair Barker French, architect Ellen Cassily (herself a Foster St. dweller), Square One Marketing, Kitchin's Ink Ltd., and C. Perry Cowell.

The bottom line? When it comes to PAC giving, at least, the prepared meals tax has a strong base of support with local elites, an in-the-know crowd that crosses political and party lines and everyday political interest.

The tax has backing with those who don't come from that background, of course -- witness the example of the Rev. Mel Whitley, who's come out as a very vocal supporter of the effort, especially in the local press.

From a tax backer's perspective, it's probably a very good thing to see Whitley as a public voice on the effort, given that the major opposition within the Bull City comes from the Durham Committee on the Affairs of Black People, against which Whitley is a much more relevant voice than, say, Jim Goodmon or Hank Scherich.

We'll have to see, of course, how the base of financial support expands when the full quarterly report is released this week -- but on the surface, there's no question that there are some significant dollars from some very interesting sources at play here.

Comments

[Tar Heelz]

This tax is supported by those who will financially benefit from its levy.

Heck, if they added a line for the "Tar Heelz Tuition Repayment Fund," I'd support it too.

[Jim]

The Museum of Life and Science was plastered with billboards and flyers supporting the tax this weekend. Pretty effective way of letting people know who will benefit from the tax. As a Orange County resident who works and spends time (and eats out) in Durham, here's hoping this goes through.

[Frank Hyman]

It's also interesting to note that although corporations--like those in RTP and Treyburn--pay 43% of our county property tax, they will be paying almost none of the PFT. Essentially the PFT pushes the cost of government off of corporations and onto working families.

Many of the projects are worthwhile, but we could pay for them less expensively with a county property tax increase coupled with a conventional bond referendum. Call it Plan B. That's an option that would also put a much smaller burden on families with children, since the PFT is a tax based on how many mouths you have to feed. The notion that a single mom, picking up a roast chicken at the grocery to save time, would simply forgo that--as some PFT advocates suggest--is really akin to saying "let them eat cake if they have no bread".

For more details on the weaknesses of the PFT, check out my guest columns in the Durham News(week ago Sat.), the Herald Sun (last Sat.) and my letter to the editor in the Indy. Incidentally, have been told by a number of progressives that they were on the fence on this issue, but after learning of the details, have decided to oppose the PFT.

Frank Hyman

[Annie]

Aren't those the companies that bring 55-60 percent of the workers into Durham County? The same folks who will be paying 40-50 percent of the meals tax...and an even larger percentage in the years to come? Study after study shows that property taxes prove to be more regressive for low-wealth people than a meals tax.

I've had just the opposite experience Mr. Hyman cites. When fence-sitting progressives I talk with learn the "facts," they see the logic of a meals tax and decide to support it.

[barry]

"The notion that a single mom, picking up a roast chicken at the grocery to save time, would simply forgo that--as some PFT advocates suggest--is really akin to saying "let them eat cake if they have no bread"."

Yet, nobody seems interested in repealing the 2% tax that same single mother pays on every loaf of bread she buys at the grocery store.

[Todd]

I'm as big a supporter of the Museum of Life and Science as anyone - my kids love it there. There's a lot of worthy projects on that list, and a few that are not.

But Frank is right - this is the wrong time for a regressive tax on rotisserie chicken and Happy Meals. Now if this meals tax was offset with an elimination of the 2% sales tax on groceries, it might be a worthy trade. But none of our City or County elected officials, almost exclusively Democrats and allegedly progressives, ever talk about the grocery tax. And please don't blame it on a lack of authority from the General Assembly - all you've gotta do is ask. Paul Leubke would rush that sucker through in record time.

Which leaves me two questions:

-What are our elected officials waiting on regarding the 2% grocery tax?

-Why isn't Frank Hyman on the City Council?

[yolanda]

I'm not buying the "mom can't feed her kids" argument regarding this tax. If mom is buying prepared foods, she can afford a penny per dollar increase on the cost of the food (I say that as a mom who buys enough prepared food). I would much rather this tax increase affect me when I go out to eat than when I pay my property tax (which would increase my mortgage payment even more).

Durham needs these funds to attract more people to the city who will spend more dollars (as residents and visitors) - all to continue increasing Durham's profile as a strong player in NC.

[Michael Bacon]

I find it very disingenuous to claim that this is an easy, or in Frank's words, "obvious" issue, one way or the other.

For starters, the arguments for the progressiveness or regressiveness of the tax rely on some very broad brush numbers, and don't generate a huge difference either way. (5.4% vs. 5.9%)

Additionally, while Frank touts the deduction of property taxes from income taxes homeowners, this is actually a case where the property tax starts to act somewhat regressively. Because higher income earners pay higher income tax rates, those deductions preferentially help high earners over low earners. While I don't have any good numbers on this, it's quite possible that a standard property tax is in fact more regressive than the PFT.

Additionally, just who "pays" the tax, between individuals and corporations, isn't clear either. Part of the revenue comes from diners, of course, but part of it also comes out of lost revenues as higher food prices lower demand. Hence, some of the money instead comes out of the pockets of McDonald's and Wendy's, whose corporate entities don't otherwise pay taxes in Durham at all. (Franchises aside.)

None of this is clear cut, and I'm not going to sit here and try to reason out which effects are larger than others without a pile of data in front of me. But that's exactly the point -- anyone who's crawing about how "it's clearly regressive!" is drastically overstating the case.

I think this tax is well thought out and well implemented, and I voted for it on Saturday.

[Bill Kalkhof]

As a member of the Steering Committee for "A Taste for Durham's Future," and its fund raising chair, I have been humbled by the response of Durham's local (key word "local") businesses and organizations --- large and small --- which have contributed to our marketing effort. We had a goal of raising $45,000, and to date we have pledges in excess of that goal.

Unlike our Steering Committee finaical supporters, one troubling aspect of this hotly contested issue is the fact that there are 3 organizations leading the opposition to the Proposed Food Tax, and 2 of those 3 are not Durham based.

Years ago, the NC Restaurant Assocaition actually helped facilitate the approval of this type of tax for both Charlotte and Raleigh --- and did so without the requirement of a public referendum. Yet, this Raleigh based state association opposes our effort in Durham which calls for a public referendum.

Then there is the effort led by "out of towner" Dallas Woodhouse. Unlike our financial supporters, his support comes from outside our community and outside our state.

The third group leading the oppostion is the well-repected Committee On Black Affairs. While I obviously do not agree with the Committee's rationale in opposing this issue, I respect the Committee's right to its opinion, and more importrantly, that they are a Durham based organization.

It is gratifying to note that many of the comments to this forum have voiced support for the Proposed Food Tax. And to all of those voices, thank you.

As your readers go to the polls to cast their votes on this important local issue, I trust they will consider the wide variety of endorsements by 29 local community organizations, PACS (including the People's Alliance and Friends of Durham) and newspapers (including the Independent and Herald Sun). Also, I trust the the op-ed articles and letters to the editors in support of the tax written by many local leaders will cause your readers to consider voting "yes" to item #28 on the ballot.

[ChuckDavis'sTennisShoes]

Frank actually *was* on the City Council, Todd, and his viewpoints were every bit as strong while he was on the Council as they are here.

My problem with the Durham Committee's opposition to the tax is that they can't have it both ways: they want to block this additional source of funding for museums and cultural organizations (among other things), yet BY FAR the organizations receiving the largest amount of financial support from the city and county are all primarily African-American organizations, as befits a town with our heritage: St. Joseph's Foundation (Hayti Heritage Center) and the African American Dance Ensemble. One could also argue that the Durham Arts Council, third biggest user of public funds, disproportionately serves the black community. My guess is these three groups comprise as much as 90% of the total arts funding in this town.

I strongly support all three organizations, with my own money I might add, but if this tax fails and funding has to be cut for these groups, I hope the blame is laid squarely where it belongs -- and that's at the feet of the Durham Committee. Let them explain to the children of their so-called constituents why a summer arts program isn't being offered, or a free dance concert had to be pulled from the schedule,or why Hayti can't afford to bring back the drumming group they loved so much.

We're in tough times for arts funding. The people making the decisions of who get what will be taking all of a group's funding sources into account when trying to spread out the available funds among as many organizations as possible -- meaning no group will be able to escape adjustments in funding, regardless of whether their funding comes from a local grant, state grant, private foundation or revenue source like the food tax.

[KeepDurhamDifferent!]

It's inaccurate to say that "nobody seems interested in repealing the 2% tax on groceries"...I called for this over two months ago, and it was published in the Indy a while back: http://www.indyweek.com/gyrobase/Content?oid=266614