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Prepared foods tax backers get first crack at public opinion

If comments at the Herald-Sun and blogs like BCR were scientific polling -- which naturally they ain't -- the prepared foods tax would seem destined for a bleak future at the polls.

Thus the lobbying campaign for the measure, which is subject to a voter referendum on election day. Tax backers, via a non-profit lobbying group called "A Taste for Durham's Future," took a stab at influencing public opinion on the measure in a kick-off meeting at Hayti Heritage Center yesterday.

As the H-S' Matt Milliken notes in today's coverage:

Thanks to its built-in marketing funds, [County Commission chair Ellen] Reckhow said, the tax could attract more than $35 million in extra visitor spending in its first year.

She characterized the meals tax as progressive, saying that wealthier families spend a bigger proportion of their income on dining out than poorer ones. The proportions are reversed for housing.

Tax backers claim the average expected annual cost of the meals tax is $20.88 per Durham household. Raising $5 million in local property taxes would cost the average household about $40, Reckhow said.

Commenters here at BCR have raised some interesting figures on the progressive vs. regressive nature of the meals tax as opposed to the property tax, noting that the amount spent on prepared meals generally rises with income, whereas the proportion of income spent on housing falls as income rises.

Also key to the backers' argument:
a meals tax would garner an estimated 40% of its revenue from non-Durhamites, versus a property tax burden that hits residents and businesses squarely on their pocketbooks.

Opponents from the Durham Committee on the Affairs of Black People and the conservative-backed Americans for Prosperity shrewdly turned out to the event to voice their opposition, getting some air time and column ink for the opposition.

One opponent of the levy raised the regressivity concern -- but also squarely pointed to her desire to see the tax aimed at health care and education needs, not the civic amenities like museums, trails and greenways, and the like for which the tax is targeted.

The DCABP's displeasure with the measure may be the most important factor in the ultimate success or failure of the initiative at the polls. This spring's County Commission primary election saw Committee-backed candidates draw strong support at the polls.

Given the record turnout among African-Americans expected in light of the presence of Barack Obama on the top of the ticket, the real question for the fall seems to be: can leaders like Reckhow, Bill Bell and others override the Committee's lobbying on the question?

If past trends hold to form, one can expect the relatively progressive and well-off precincts in west-central Durham to support the measure. I wouldn't expect to see North Durhamites turn out in force in support of this, and South Durham is a wildcard.

Without the support of voters in majority-minority district -- voters who've backed Bill Bell for years -- the measure seems to face an uphill battle. The question now comes down to one of lobbying and message. In a year when the national economic picture is mostly cloudy, can the backers of this tax measure muster the support to win?



The answer is "no". When AFP-NC and DCABP are in agreement, you know it has little chance.

And this is before the local candidates and lobbying organizations weigh in. I am campaigning against the tax, and the NC Restaurant and Lodging Association is obviously greatly opposed (thanks to their members for the campaign contributions, btw).

We need to try again, with a <$20 exemption for the working poor. And the funds need to go to fight gentrification, or other community needs as Lavonia Allison points out.


Support the PMT now, or face a bond package later that will likely pass with goodies for everyone.

If this progressive tax fails, and the city is hell-bent on getting that MLB museum and other amenities, a proposal will come forward for a bond that funds them, along with Victoria Peterson's oft-mentioned center for vocational training, "The Committee's" new pools and rec centers for inner East Durham, and for the Hesters of Phoenix Square, a spruced-up Fayetteville Street to make their shoddy strip mall look more presentable.

"The Committee" and other special interest groups are just afraid they won't get a big enough slice of the revenue pie for their pet projects. Their opposition has nothing to do with higher taxes. If the tax proposal just funded the items above, the outcome would be different.


It's a dumb idea to have small business owners (especially chefs) collect taxes.


@GL: if and when the bond issue comes up we can fight that as well. If you care about the working poor, you will fight on their behalf so that they don't lose their homes (in the case of bond issue driven property tax increase) or go hungry (the PMT).



And jobs for non-rich people are at risk too:

Consider the case of the La Farm Bakery of Cary. They were recently fined $150,000 for failure to pay the Wake prepared food tax. It turns out the couple that owns the small bakery didn't understand the tax code: some of their loves of bread were subject to the tax while others were not.

Here's what one Democrat said about the case:
"Sen. David Hoyle, a Gaston County Democrat, said the La Farm case is one of a string of examples of the Department of Revenue aggressively targeting small businesses that have tried to follow the law and don't have the resources that large corporations do."

You can read about it here:


Let's not forget that restaurants and grocery stores will have to pay 2-3% of the proposed sales tax to credit card processors (Visa, Mastercard, AMEX) on all credit card transactions. When was the last time anyone paid cash for dinner out in Durham? Even if 1/3 of the transactions are cash, this is a huge windfall for them.

Why should we pad the pockets of the credit card processors with our tax dollars?

Kevin Davis

@GG: Worth pointing out that both (IIRC) Toast and Revolution are or are proposed to receive City funds (through grants or city-backed small business support) to open their businesses downtown.

Do folks feel that is an appropriate use of revenue from property tax (or sales tax, license and permit fees, downtown development grants, etc.)?

I hate the notion of the poor, besotted restaurateur getting it from The Man with this tax when that support, in some cases, goes both ways. Restaurants in Durham should benefit from increased tourism due to the DBAP, DPAC, and other revitalization. Admittedly: that impacts downtown and the surrounding areas more than it does (say) North Durham and South Durham.

It's also interesting to me that no one complains about the regressivity or not of the hospitality tax on hotel rooms, which to my recollection goes to support projects like the performing arts center. Is that a sales tax with which we should do away?


That's because the homeless sleep on the street rather than in hotel rooms. (OK, I'm sure some do, but they're likely SROs or shelters exempt from the rooms tax.)

The Feather Bobbing on L.A.'s Easter Hat

So, to all you geniuses opposing this tax: how do you propose to get some tax dollars out of the thousands and thousands of people who come to Durham County every day to work, wear down our streets and use our public services, and then go home to other counties to live -- thus paying property taxes in other counties and depriving us of the money to pay for the services they use?

Could not agree more with the Green Lantern -- although I would go so far as to say that the DCABP doesn't give a rat's ass about the poor black community's needs and if they are paying a disproportionate share of a prepared food tax. They just want to make sure their pet projects get funded, preferably ones in which they can profit personally, since most of their membership is comprised of upper income blacks -- many of them with a big stake in city-related projects. That is the biggest bunch of self-serving hypocrites in town. They are interested in personal profits and personal power, period. I'm trying -- and failing -- to think of a single meaningful thing the DCABP has done for the lower- or middle-class black community in the last 20 years. More specifically, what the heck has Lavonia Allison EVER done for the poor black community? And the only time she ever fought gentrification was so she could remain a slumlord -- so, please, let's not allow her to anoint herself as a champion of poor blacks over this issue. That's just b.s. to the highest degree possible.


As I've said before, I'd fully support this tax if it was only levied on restaurants with a average lunch bill of about $10/person and dinner above $20 a person. That would prevent yet more taxation on the poor. Sure, this tax is - strictly - slightly progressive. That's just not good enough...


The fact that a tax like this is even being proposed is really depressing. Eating at restaurants is a treat for most of the people in Durham. Even McDonalds for some.

If the county government thinks they need more money, then raise the property tax or the sales tax. Ask Raleigh to enact a local income tax.

The reason the county commissioners don't do this is because they know that if they did they would be voted out of office.

I encourage everyone to vote down this meals tax; force our elected officials to actually make some decisions on how they spend what is in the end OUR money. And stop pretending that some "visitors" will make everything all right.

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