A proposal to let Greenwood collect its own food and beverage tax was briefly revived this week and one step away from being approved before lawmakers killed the idea again.
The issue of local food and beverage taxes will now be discussed by lawmakers in a summer study committee, leading to recommendations for how to approach the topic next year.
Greenwood has been trying to get the legislature to allow the city to charge an extra 1 percent sales tax when people dine out at restaurants. If the measure was approved at the Statehouse, the tax wouldn’t automatically go into effect; city council members would need to decide whether to charge it. The tax could raise about $750,000 to $1 million per year, which the city would primarily use to hire new police officers and firefighters, Mayor Mark Myers said.
Earlier in the session lawmakers didn’t act on bills authored by State Rep. John Price, R-Greenwood, that would have allowed the tax for Greenwood only or a statewide proposal that would allow any local government to charge it. The matter was considered dead this year, but Price was able to attach the Greenwood tax to a similar proposal to allow the town of Rockville to charge a food and beverage tax.
Myers and Price both had been meeting with legislators and talking about why Greenwood needs the tax and what it would be used for prior to a committee meeting aimed at ironing out some of the amendments made to the Rockville proposal. Committee members were initially supportive of the Greenwood proposal, but the author of the original bill was concerned the additional cities and towns that had latched on could cause legislators to vote down his measure. So Greenwood and other communities were cut from the proposal.
Myers is frustrated that the proposal died again this year because Greenwood has been working to address concerns raised by lawmakers. Legislators rejected a Greenwood-only suggestion before and asked for a statewide proposal. This year, legislators said they wanted a local proposal again, Myers said. Previously Greenwood also had planned to use some of the tax money for parks, but narrowed it to just public safety to address concerns, he said.
“The way the Senate or the House asked last year was they wanted it narrower. We narrowed it down and then they kicked it out anyway. Public safety is where we’re really hurting there. I tried to do something they requested to do and they shot it down anyway. I don’t understand their thought process,” Myers said.
Price shared the mayor’s frustration that the proposal was cut at the last minute, but some issues take multiple years of discussion at the Statehouse before they get approved, he said. By discussing the issue during a summer study committee, lawmakers are showing an interest in considering a more widespread solution and discussing specific concerns about food and beverage taxes, he said.
The state should approve a law to allow any county, city or town to enact its own food and beverage tax and then leave it up to those local governments to make the decision on whether to charge it, Price said.
“Sometimes it takes three to five years to get something in. If they’re going to do something, we need to do it statewide and let the locals decide it, make it a ‘may’ and not a ‘shall’. That’s something for them to weigh out, let those elected officials in those cities and towns talk about it in a public meeting and they can adopt it if they so choose,” Price said.
Local taxes like the food and beverage tax are needed because state tax laws and property tax caps don’t allow a city or town to increase their spending to pay for more police officers or firefighters, Myers said. Police officer salaries are paid for out of the city’s general fund, which primarily comes from property taxes and also pays for running other city offices.
State law does allow counties to enact local option income taxes specifically for public safety, but there are multiple problems with that approach, Myers said. That tax would apply to all of Johnson County and would need to be approved by the county council, which hasn’t shown any interest in approving new taxes, Myers said.
Also, a local public safety income tax would be charged only to people who live in Johnson County, while police and medical runs are also for people visiting Greenwood to go to the mall, shop along State Road 135 or eat at restaurants, Myers said.
Since the food and beverage tax is charged to diners, it would allow the city to get visitors to pay some of the cost of providing police that may need to investigate if their car gets broken into or send an ambulance if they get into an accident, Myers said. Greenwood has about half of the police officers and firefighters recommended by federal safety agencies based on population size, Myers said.