I’ve been asked several times what kind of revenue a meals tax might generate, which is a very fair question. It’s similar to liquor by the drink, meaning does its potential costs outweigh its benefits? So, I’m continuing to hunt down numbers and figures, etc. with the intent of estimating revenue as best I can. It’s difficult to get these figures because these are private businesses who don’t have to share this type of information with the public. (Not saying they should, just saying you can’t FOIA request this kind of information)
I have done my best to identify all of the places in the county that serve prepared food that would be subject to this food and beverage tax a.k.a. Meals tax. I’ve placed a question mark by some of them because I’m not sure if they’re open or if they’re serving food. I’ve listed these places below, please let me know if I’ve missed any:
Bowles Corner Market
Elizabeth’s Pizza
Noonie’s Grill
Friendly’s
M&M’s
W&W
Howell’s
Fairy Stone Park
Fairy stone Pit Stop
Country Convenience
Robert’s Market
Orchard View
Poor Farmer’s
Jane’s Cafe
Primland
Doe Run
Dry Pond Cafe
Dry Pond Convenience
Claudville Cafe
Blue Mountain Petro
Ararat Grocery
Boyd’s Restaurant
Willis Gap Grocery
Critz Grocery
All of the vendors at Floydfest (alcohol too?)
So the math is somewhat easy to do here if you just lump them all together and estimate their combined revenue and multiply by 4% to find the potential revenue generated. These are only estimates and I have no clue how much these places actually make:
– $1M = $40K
– $2M = $80K
– $3M = $120K (estimated “floor,” see below)
– $4M = $160K
– $5M = $200K
– $6M = $240K
– $7M = $280K
– $8M = $320K (Town of Stuart’s revenue)
– $9M = $360K
– $10M = $400K
Primland’s budgeted revenue on food and alcohol has been $3 Million in recent years. So, a 4% tax on $3 Million would be $120,000. I feel like that’s the safest minimum in this example. If we use this metric as the “floor” on revenue generated from a meals tax, it would be $120K or 76% of $0.01 per $100 in real estate tax.
We know that $157,000 is equal to $0.01 per $100 in real estate tax. And I believe from the Davenport report that the next called for real estate tax increase to be voted on in 2020 would need to be an additional $0.11 per $100. So, we need to find $1,727,000 in alternative revenue and additional cuts in order to avoid another real estate tax increase. No small task.
If you use my lowest figure from above, the “floor,” I’ve estimated that a meals tax could help subsidize the need for another real estate tax increase by $0.0076 per $100, which is not much.
However, if you use $8M in revenue, which is the same as the Town of Stuart’s revenue (they draw roughly $325,000 in meals tax each year), then a meals tax could help subsidize the need for another real estate tax increase by $0.02 per $100. So we’d still need to find another $0.09 per $100 in cuts, but I’m guessing that this figure might change based on the new (likely higher) real estate tax assessment as well.
Again, these are estimates or sheer guesses at this point, and a meals tax is not a magic pill or a get out of jail free card for the debt that we’re in based on mismanagement. This tax is designed to help subsidize or add alternative revenue to our general fund from sources other than additional increases in real estate taxes. The estimates I’ve provided could be high or could be low.
I’m sorry that I can’t do you any better than just estimates. However, I’m in the “every little bit helps” camp so I’m voting “yes” on the meals tax. What about you?
Wren Williams
Stuart
