ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, May 9, 1996 TAG: 9605090071
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: DAN CASEY STAFF WRITER NOTE: Lede
Roanoke City Council candidates were careful not to let the term ``tax increase'' cross their lips during the election campaign.
But less than 18 hours after polls closed, members of the current council - including some who will serve on the next one - were talking about raising the restaurant meals tax by 25 percent.
``Oh, Jesus. People are screaming and hollering now,'' said Judy Melki, a waitress at the Deli Shoppe on Walnut Avenue. ``It's like, why wasn't this mentioned before [the election] rather than right after?''
The subject arose Wednesday during deliberations on next year's budget. Vice Mayor William White asked about the meals tax as a way to increase revenues.
City Finance Director Jim Grisso estimated that boosting the levy from the current 4 percent to 5 percent - the maximum allowed by state law - would raise another $1.2 million annually.
It's unlikely that any meals tax increase would take place before fiscal 1998.
"The discussion today, it may lead to something, it may not," Grisso said. "It depends on the new guys coming."
White and Mayor David Bowers said they would want the new revenue poured into promotion of Roanoke as a tourist destination. They said promotion would attract people, who then would spend more money and yield greater revenues for city government.
They noted that Asheville, N.C., a smaller city a few hours south of here, spends $2 million a year on tourism promotion, far exceeding the estimated $650,000 annual budget of the Roanoke Valley Convention and Visitors Bureau.
And many of the people who eat in city restaurants are outsiders, they said; thus, outsiders would pay a share of revenues, from which the city would benefit.
"Usually, I'd be opposed to a sales tax, but for Roanoke citizens [increasing the meals tax] would be a good thing," Bowers said.
"When we have taxes on citizens who don't live in the city but come here, that's a good tax."
Bringing more tourists in also would help area hotels, which are struggling because the Hotel Roanoke has taken a significant portion of business away from them, White said.
Vice Mayor-elect Linda Wyatt has other designs on the money. She thinks the city ought to bank it as a hedge against a future budget crisis.
City revenues are not increasing at the pace they did a few years ago. Meanwhile, upcoming state and federal cutbacks will put a squeeze on the delivery of services.
"I think it's penny-wiseCQ - MB and pound-foolish when you know this [budget crunch] is coming down and you don't protect yourself against it," Wyatt said.
Councilmen-elect Carroll Swain and Jim Trout, who attended the budget study session, said the city ought to move slowly with the idea of raising the meals tax.
Trout, a retired railroad economic development analyst, predicted that adding another 1 percent to the meals tax "would have very strong economic consequences to it."
"We should not even think about increasing taxes yet," Swain said. "I found out walking the streets during the campaign that people are mad about taxes." He also said an increase could drive restaurant patrons into Roanoke County, where the meals tax is 4 percent.
A proposed increase also could ignite a battle similar to one in 1989, when City Council first decided to levy a meals tax, Trout said.
Restaurateurs gathered 24,000 signatures on anti-meals tax petitions, and the issue became the subject of a public hearing. So many people wanted a say that city administrators moved the hearing to the Roanoke Civic Center, Trout said.
That hullabaloo could arise again, judging from reaction Wednesday by business people, restaurateurs, working people and one Republican leader, who sounded surprised, shocked and disgusted.
"Raising taxes? That's what Democrats do," said city Republican Chairman Ralph Smith, with a nod toward the 6-1 Democratic-Republican lineup on the new council. "That's their theme song."
White and Bowers said boosting the meals tax has been talked about on and off for at least the last 18 months. But Councilman Mac McCadden said he can't recall any conversations on council about it.
"I think in the business community ... we have a lot of reservations about increasing taxes," said John Stroud, president of the Roanoke Regional Chamber of Commerce. "We're surprised that there's a proposal to increase the meals tax."
"Oh God, you're kidding," said Rob Callahan, owner of First Street Fine Food & Drink on Market Street and chairman of Downtown Roanoke Inc.'s Market Merchants Committee.
"The question we get all the time anyway [from out-of-towners] is, 'How much is the tax here?' I think it affects people's dining decisions. At a time when there's growth in this industry in downtown Roanoke, I'm concerned about it."
But not everybody is against an increase.
If the revenues went toward tourist promotion, said Hotel Roanoke General Manager Gary Walton, "I'd be for it. I think that's a good use of those dollars."
Staff writer Mary Bishop contributed to this story.
LENGTH: Long : 102 lines ILLUSTRATION: PHOTO: PAUL L. NEWBY II/Staff. David Bowers, seen enjoying hisby CNBre-election Tuesday night, on Wednesday said a higher meals tax
would be ``a good tax'' paid
largely by outsiders. color.