Greensboro leaders want to enact a 1-percent prepared-food tax. Here’s how that’s worked in Charlotte.

Featured photo: A slice from Zämbies Pizza in Charlotte, NC (photo by Gale Melcher).

A slice of the Sleeping Beauty from Zämbies Pizza in Charlotte’s NoDa district rings up at $7. On top of that dough — other than the bubbling cheese, peppers, onions and a savory drizzle of balsamic glaze — is 58 cents of tax. Thirty-three of those cents go to the state, 14 go to Mecklenburg County and four are directed to transit. The final seven are collected due to the county’s 1-percent prepared food and beverage tax, enacted by the state legislature in 1990.

Those tiny bites out of consumers’ bills reap more than $40 million annually for the city of Charlotte.

Greensboro’s Mayor Nancy Vaughan is hungry for a piece of that pie.

For the last several months, city leaders in Greensboro have been toying with the idea of a countywide 1-percent prepared-food tax that could be levied by the state legislature — with or without a voter referendum. Thus far, city leaders and power players have been pushing for the latter option.

In May 2023, TCB uncovered emails between the Greensboro Coliseum’s Managing Director Matt Brown and leaders such as Vaughan, County Commissioner Skip Alston and other local power players.

In a September 2022 email, Brown wrote that he was “compiling information” on NC cities and counties that have “enacted this tax (without the necessity of a voter referrendum [sic]).”

But in May 2023, Vaughan told TCB that there was “no movement.” Still, Greensboro Sports Foundation’s president and CEO Richard Beard, who is “leading the effort” according to Brown, had employed lobbyists with KTS Strategies since January 2023.

In June 2023, Councilmember Sharon Hightower said that she “can’t support a food tax without a referendum.”

Taxing food for tourism

The city of Greensboro has been enjoying the tourism attracted by events at the Greensboro Coliseum and the Tanger Center, as well as youth sports tournaments. But city leaders and leading business moguls are worried that decaying and out-of-date facilities will fumble the bag.

A prepared-meals tax like Charlotte’s could help, Vaughan said at this year’s State of the City address on March 20. She estimates that a county-wide prepared-meals tax would bring $20 million into the community, which could be used to upgrade the city’s current facilities and invest in new sites. Cities that benefit from this tax, such as Charlotte and Raleigh, are “ahead of us with prepared-food tax money,” Vaughan said. Mecklenburg and Wake also have a hotel-occupancy tax. The profits from this, plus the meals taxes, are specifically designated for tourism projects.

According to the city of Charlotte, their 1-percent prepared food and beverage tax brought in more than $42 million in fiscal year 2022.

In October, more than 66,000 people crammed into Charlotte’s Bank of America Stadium to watch Charlotte Football Club play International Miami Football Club — featuring the famous Lionel Messi. Fans of the soccer star traveled from far and wide to the Queen City to watch him play, and brought their wallets to the city’s hotels and restaurants with them.

The plan is to eventually upgrade the stadium — built in 1996 atop a hospital for Black residents — and potentially draw from their pot of tourism tax money. Using those taxes, Charlotte put more than $200 million toward upgrading the Spectrum Center in 2022. 

Tucked away into a pocket of NoDa is the beloved Smelly Cat Coffeehouse and Roastery, a relaxing “third space” with a steady stream of chatting customers.

When she heard the Spectrum Center’s price tag on the news, owner Cathy Tuman said that she was “shocked” by the amount.

Still, Tuman added that these venues reward local businesses.

“The success of these venues does produce jobs, and also brings in business to us,” she said.

A $3.25 cup of the shop’s refreshing wild berry hibiscus iced tea has 27 cents of tax tacked onto it; three cents come from the 1-percent tax.

“I don’t see people not coming because of taxes,” Tuman added.

The city’s prepared food and beverage tax was originally scheduled to sunset in 2031, but has proven so fruitful that the North Carolina General Assembly extended its reign over Mecklenburg County’s restaurant bills to 2060 last year via Session Law 2023-144. 

At the address on March 20, Beard talked about the Gate City’s effect on sports — and sports’ effect on its economy. 

“This sports tourism has a huge impact and even more reason to keep these facilities relevant so we can keep what we have but also build on it,” he said, referencing facilities like soccer fields, pools and pickleball courts.

Still, restaurant owners and locals who enjoy a bite out to eat will be paying the price along with tourists. Some have called it a “burden” on small businesses.

A burden on small businesses?

Josh Lemon, the owner of the Southern Wok, a Triad-based dumpling business, expressed worry about how the tax will affect the consumers.

“When you get home from a long day of work, you don’t really want to cook your own meals so you go out and get a prepared meal,” he said.

Surging prices could mean less visits from their customers.

“People are already complaining about the fact that it’s expensive to eat out, so that one percent might go a long way with that, who knows?” he said.

As for Lemon’s business, which he runs out of a food truck with his wife Megan, the tax could “make it a little bit harder” for him to get everything done, he said.

“As far as finances go and stuff it’s not much, but everything counts,” he said. “It’s already been kind of a rough year, like the winter was a little bit slower than usual this year, where people were just opting not to go out to save money. It’s gonna make small businesses that can’t really afford even a nominal increase struggle a little bit more.”

Other Greensboro locals such as Austin Jeffries, manager of Double Oaks and co-founder of Borough Coffee, want more information on exactly how raising their prices will benefit them and the residents they serve, including what the money will go toward.

“Given my general ideology, I am pro taxes for public improvement,” Jeffries explained. “I just think that it is the lowest barrier of their job to spell out precisely what it’s for. They could do a lot higher tax from me if they spelled out a very specific project.”

And despite Lemon’s concerns, he agrees. 

“Paying your taxes is important,” he said. “Hopefully it’ll get us to fund some stuff.”

If the tax is passed, via the legislature or through a voter referendum, there are many ways the proceeds could be spent. 

Asheville put some of their tourism-tax funds toward greenways and, according to the city’s Mayor Esther Manheimer, there’s talk of spending it on transit. It could even be spent on creating affordable housing for the tourism-industry workforce.

And even though the tax has been successful in Charlotte, residents there make more money than those in Greensboro.

According to Census data, the median household income in Charlotte is $74,070; in Greensboro it’s $55,051. Additionally, 18 percent of Greensboro’s population lives in poverty compared to Charlotte’s 12 percent. 

The two cities have stark design differences, too.

After Saturday’s match against Cincinnati’s football club, fans emerged from Bank of America stadium straight into uptown Charlotte’s many culinary offerings — or hopped on the light rail to one. Restaurants all over the city buzzed with fans.

After an event at the Greensboro Coliseum, visitors have to drive nearly three miles to access downtown’s bars and restaurants.

But Vaughan argues that this tax will level the playing field. 

“We should have the people, who are coming to Greensboro to use these facilities, to have some skin in the game,” she said.

What’s next?

During the March 20 address, Vaughan pointed to Guilford County Schools’ field trips to the symphony at the Tanger Center.

“That is why we need to have buildings like that, to expose people to arts and culture,” she said. “It’s not only about sports.”

Beard told TCB that in that way, the tax “also benefits the community.”

As reported by TCB last year, lobbyists with KTS Strategies have been employed by Greensboro Sports Foundation since January 2023 to lobby for the tax. KTS was being paid $10,000 per month for their services and four of their lobbyists were registered in the state’s lobbying directory — up until December 2023.

That month, Ches McDowell — one of GSF’s KTS lobbyists — announced his new lobbying firm, Checkmate Government Relations, taking other KTS team members such as Nelson Freeman, Hampton Billips and John Easterling with him. All four were previously assigned to GSF to lobby for the tax.

“We don’t have anybody contracted right now, so no, we don’t have a lobbyist,” Beard said in a recent interview with TCB. Beard added that there have been “no decisions on pursuing legislation” during the General Assembly’s upcoming legislative session.

But he’s not giving up any time soon. 

“The prepared-food tax, at least out of my mouth, will not go away,” he said. “It’s too important for the area.”

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