An additional tax that you would pay when you go out to eat is once again being considered at the statehouse.
The proposal would allow cities and towns to adopt an up to 1 percent food and beverage tax, which would be charged on restaurant meals and ready-to-eat foods sold at grocery stores and convenience stores. Currently, if a community wants that tax, officials have to get permission from the state. Under this proposal, the local community could approve the new tax.
The tax is one Greenwood Mayor Mark Myers has been pushing to get approved for years as a way to bring in more revenue to the city to pay for public safety expenses. But year after year, the legislation has not made it out of the statehouse.
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Whether the proposal will be approved this year is questionable, said State Rep. Daniel Leonard, a Republican who represents northeast Indiana and proposed the legislation.
This year’s legislative session is short, and lawmakers are set to consider multiple other issues, he said. The proposal has been sent to the House Ways and Means committee, but has not yet received a hearing — the first step before the proposal can go to the full legislature for a vote.
If the bill is not considered this year, Leonard said he plans to propose it again next session.
For Leonard, the goal is to give some power to local communities, who repeatedly request permission from the state to enact a local food and beverage tax, Leonard said.
After 14 years on the House Ways and Means committee, Leonard sees those requests come up year after year, and the decision is not an easy one for state lawmakers, he said. Having the issue proposed, considered and voted on locally also gives the community a better chance to be informed and weigh in, rather than if the proposal goes to the statehouse, he said.
“It just seems very difficult to make a decision looking at financial condition of a particular community to say they should have it, and someone else shouldn’t,” Leonard said.
“We elect local officials, and if a local person feels the need to increase a tax in an area, if the constituents don’t like it, they will vote them out.”
At the least, Leonard hopes to bring some attention to the issue and start discussion during this session, so the proposal can again be considered during the next session, he said.
Myers is hopeful that the legislation could still get approval this session, and the city has been working with its contracted lobbyists to talk about the proposal with state lawmakers and are hearing some support, he said.
“Maybe this will be the year it will pass,” Myers said.
If approved, estimates have been that Greenwood would collect about $750,000 per year in a 1 percent tax, Myers said. And, as new restaurants continue to be built in the city, the revenue from the tax would continue to grow, he said.
That would be enough to hire three to four new police officers and three firefighters, which the city needs, Myers said.
In Franklin, officials have not been pushing for the tax, and Mayor Steve Barnett said he doesn’t think the city needs it. As the city grows and brings in new businesses and visitors, that increases revenue, he said.
The city was able to add a police officer and two new street department workers this year, Barnett said.
“Some communities do need it. But I can’t see a need for it,” Barnett said.
“I don’t see a reason to increase taxes just to increase them.”
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Here is a look at a proposal being considered by state lawmakers for a local food and beverage tax:
What: Allowing cities and towns the authority to approve an up to 1 percent tax on restaurant meals and ready-to-eat foods. Currently, local governments have to get state lawmakers to approve that tax.
Where it stands: The proposal was referred to the House Ways and Means committee, but has not yet gotten a hearing.
When: This year’s legislative session ends March 14.
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