Restaurant owners organize to oppose prepared food tax

A group of about 25 area restaurant owners and managers agreed Monday (July 19) to launch a 60 day to 90-day process designed to defeat any attempt by the city of Fort Smith to gain voter approval of a 1% prepared food tax.

The Fort Smith board of directors have indicated a tentative plan to ask Fort Smith voters in spring 2011 to support a 1% prepared food tax to fund a shortfall of between $750,000 and $1 million to operate the Fort Smith Convention Center. The board spent more than 18 months trying to come up with a solution to plug the annual deficit. A state turnback program ends in June 2010 from which the city has received about $1.8 million a year. In 2010 the city will receive only $888,723 in 2010.

An ad hoc convention center committee formed by the board of directors first met April 22 and reviewed several options, including a 1% hospitality tax, finding cuts in the city’s roughly $40 million operating budget, reallocating a portion of the city’s 1% street tax, re-instituting a business license fee and finding a 3rd party operator.

That group eventually endorsed a 1% prepared food tax that would also support the U.S. Marshals Museum and other city art and entertainment facilities and event.

City Directors Bill Maddox and Kevin Settle oppose the 1% prepared food tax, saying instead that the city should ask voters to redirect a portion of the 1% street tax — which generates between $17 million and $20 million a year — to support the convention center and other quality of life projects.

With one noted exception, the restaurant owners gathered Monday at Art’s BBQ — at the invitation of the restaurant owner Eddie York — oppose the prepared food tax. York began the 8:30 a.m. meeting with a litany of taxes — sales tax, beer tax, mixed drink tax — his restaurant patrons already pay.

“They’ve (state and local governments) have made it damn tough for a restaurant to survive,” York said, adding that the city will start with 1% and eventually push it to 3%.

York said the didn’t want the effort to be seen as “beating up on the convention center,” but followed that to say the convention center doesn’t do enough for the community to justify the tax. He also challenged city leaders “to get their house in order” before asking the restaurant industry to support a tax to fund the convention center.

Jerry Gardner, owner of the TGIF franchise in Fort Smith, said his restaurant does not benefit from the convention center, the Fort Smith Golf Classic, the rodeo or the state fair. He is not opposed to the convention center but is opposed to the city “picking on the restaurants to support the convention center.”

The noted exception in the crowd was Joe Caldarera, whose family owns Taliano’s and Emmy’s restaurants in downtown Fort Smith within about 10 blocks of the convention center. He said the convention center helps his business, and urged the group to study the issue and come up with solutions rather than just be in opposition to a proposal.

“Do I want the tax? No. Do I want the convention center? Yes,” Caldarera told the group.  He later noted: “We can’t just be opposed to it (prepared food tax). We need to have a solution.”

York, who said early in the meeting that the convention center doesn’t “bring me any business at all,” admitted later that he caters anywhere from 5-10 events a year at the convention center. He said the revenue is around $20,000 a year, and was as high as $35,000 in past years when catering Junior League events.

Patrick Jacobs, not a restaurant owner but a city director candidate for Position 4, recommended the restaurant owners group meet with a few members of the ad hoc committee to learn why the committee recommended the prepared food tax. Joe Caldarera’s father, Tom, was a member of the ad hoc committee. George Catsavis, a restaurant owner and also a city director candidate for Position 4, also was a the Monday morning meeting.

York, the de facto leader of the group, agreed with Caldarera’s call for the group to develop a solution and agreed with Jacob’s meeting recommendation. He said the group will meet again within 30 days and hopefully report as a group to the city board within 90 days.

Other restaurants represented at the meeting included Blaze’n Burrito, Bravo Italian, Calico County, Hamburger Barn, Pink Flamingo and Re-Pete’s.