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[POLL] What Do You Think About Chafee’s Proposed Meals Tax Hike?

Under the governor's budget plan, the restaurant tax would go from 8 percent to 10 percent next year.

When it comes to Gov. Chafee's proposal to increase the restaurant tax from 8 percent to 10 percent, restaurant owners in Rhode Island have strong feelings. 

“This is a second restaurant tax,” said Matt Wronski, owner of  and  in East Greenwich. “First they added a percentage point that was going to be temporary,” he said, referring to the increase from 7 percent to 8 percent in 2003, when Gov. Carcieri was governor. That 1 percent, which is still collected, goes back to cities and towns. Chafee's 2 percent increase would go to funding education on the local level.

“Once they get their fingers in your pocket, they don’t let go,” said Wronski. “I’m from Detroit. I’ve seen this movie and it doesn’t turn out well.”

He continued: "I've had to cut staff. I've had to figure out better ways to make purchases. It's not enjoyable. You have to have a budget that makes sense."

John Chan, owner of  in Woonsocket, said he’s being hit doubly hard. 

“I don’t think we can take any more taxes, whether it’s on food or property,” he said. Woonsocket is facing a possible supplemental property tax increase of 15 percent this year to help close its school budget gap. 

“Business has already felt the impact,” said Chan, noting the meals tax in nearby Massachusetts is only 6 percent. 

According to Christine Hunsinger, Chafee’s communications director, the idea for the tax came from the cities and towns themselves. 

“This was one of the suggestions that came out of the meeting with the mayors,” she said, referring to a series of municipal strategy sessions Chafee held with mayors and town managers. “Ideas were talked about and discussed — this was one of those suggestions.”

The additional 2 percent in taxes would be funnelled back to cities and towns through the education funding formula, she said. “The governor’s been very clear and very committed to the cities and towns this year.”

“If the implication is that the mayors proposed a 2 percent tax, that is not accurate,” said Cranston Mayor Allan Fung. “I’m not sure I would phrase it that we proposed the 2 percent tax. I came from a small business background and a restaurant background. I certainly support the acceleration of school funding but I do have serious concerns about imposing that 2 percent.”

That said, Fung wouldn't say he was absolutely opposed to the proposal. "It’s not an easy yes or no," he said.

"It’s not a broad-based tax," argued Hunsinger. "It’s a tax that hits disposable income. Property tax is the most difficult to pay. Those continue to skyrocket at the municipal level.... It’s really pennies on a pizza."

For Wronski in EG, those pennies could make a difference.

"Squeeze another percentage point from the people already reluctant to go out, they'll just decide to stay home," he said.

Chmn March 22, 2012 at 01:09 AM
10% is hard to swallow. I would rather see a 10% income surtax on RI government employee salaries over $80k.
Don March 22, 2012 at 02:27 AM
Its not Pennies on a Pizza!! if you spend $10,000 on say a wedding reception its another $1000 in tax.
Gordon March 22, 2012 at 12:51 PM
Add this tax to the new bridge tools and to the cost of seasonal parking in a town like Newport and you start to understand why people stay away and think that all we care about, as a state, is poaching on those that are foolish enough to come. The first impact of the tax is on servers. The average 15% tip becomes a 13% tip.
Collette Bernard March 22, 2012 at 01:54 PM
People in the restaurant business have enough trouble making a profit....give them a damned break remember they hire many people.
Andre March 22, 2012 at 11:36 PM
Taxes on businesses are paid by the owners, the employees, the customers, or some combination of both. If the tax were limited to those time periods when restaurants are operating at or near 100%, e. g. Memorial Day to Labor Day, high demand would probably result in the tax increase being borne, for the most part, by the customers. When we are not in "high season," demand is more flexible. (The economist would say "elastic." At those times of the year, customers might stay home, eat in Massachusetts, or cut back on tips. The result is to pass the cost on to the owners in terms of fewer custsomers and to the employees in the form of lower tips. Don's remark about wedding receptions is right on point. Newport is at capacity in the summer. During that time customers are willing to pay extra to be here. However, if you have a wedding reception facility in East Providence or Providence in the off season, Venus de Milo is not that far away, The customer can save $4.00 per head on a $100.00 banquet dinner just by driving east on Route 6. Does the governor have any statistical analysis that would indicates where the burden of this proposed 25% increase in taxes would fall? By the way, remember when the lottery money was to be used to support education? The destination of the money raised by this proposed tax will probably be that black hole known as the general fund.
Jack Baillargeron March 26, 2012 at 06:13 PM
Easy answer, because our governor is an Idiot, As well as the DEM controlled Legislature (for over 75 years now). No-one upstate knows or wants to cut government in this state. It is my belief they are all spayed or nutured up there. With Chafee it has always been obvious by the way. Those who think this may be harsh or out of line, have probably never met an talked to this piece of work, I have many times over the years and can tell you first hand he is nothing more than a go with the flow and scam guy, to keep his job, no different than his father was. Still can't get over even 36% voting for this guy, well you got what you wanted. Hard to believe 36% of the voters in this state enjoy being terrorized by the tax and spend, anti-business, anti-middle class and just plain and simple legend in his own mind. He should be impeached for lack of intelligence to hold office, along with quite a few in the legislature. Way to screw small business. Should add that I am sick and tired of this, lack of concern for taxpayers in this state. just in case someone does not get my point. It is surprising more people are not commenting on this or taking part in th poll. I guess, voter apathy is still alive and well, how sad for all taxpayers. ;-{

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