Talk of potential 1-percent county-wide prepared food tax revived during Greensboro city council work session

Featured photo: City councilperson Marikay Abuzuaiter (far right) brings up the idea of a prepared food tax during the May 9 city council work session. (screenshot)

On May 2, TCB published an article about emails sent last year between Greensboro Mayor Nancy Vaughan, Guilford County Board of Commissioners Chair  Skip Alston, Greensboro Coliseum Director Matt Brown, city councilmembers Nancy Hoffman and Zack Matheny, and other power players in Greensboro revealing their interest in enacting a 1-percent county-wide prepared food tax without input from voters.

But after the May 2 city council meeting, it seemed like the idea had come to a standstill. Vaughan told TCB in an interview that “at this point, there is no movement” on the idea of a prepared food tax.

Matheny also said that he “attended some meetings and was copied on emails” but that he “hadn’t heard of anything in a while.”

But the idea was resurrected during a May 9 work session when councilmember Marikay Abuzuaiter suggested it could increase revenue for city programs and amenities during a discussion about the city’s aquatic facility needs. According to the report, the cost for renovations of swimming pools, sprayground upgrades, and addition of facilities adds up to nearly $82 million.

Abuzuaiter mentioned that she is a council liaison to the Greensboro Sports Foundation, whose President and CEO Richard Beard was included in emails discussing the prepared food tax.

On Sept. 16, 2022, Brown wrote to Vaughan, Beard, City Attorney Chuck Watts, City Manager Taiwo Jaiyeoba and councilmembers Hoffmann and Matheny, saying that he and Beard were “leading the effort to kick off a Public/Private campaign to implement this initiative successfully through to State Legislative approval ASAP.”

Abuzuaiter said during the May 9 work session, “We have been discussing quite extensively — other cities are way ahead of us…. Greensboro has the opportunity to become a youth sports town, which we basically are but all of the other cities are so far ahead of us building all these new facilities.

“They are seeking other avenues to collect revenues for people that are passing through on a… food sales tax,” she said, adding that people who pass through those cities for tourist attractions like tournaments “are paying that.” Abuzuaiter acknowledged that residents who frequent local restaurants would not be exempt from the tax, saying, “Yes, if I go, I’m gonna have to pay that penny as well.”

If a county-wide prepared food tax is enacted, an additional 1-percent tax would be tacked on to checks at local restaurants. This includes take-out orders. The combined state and county sales tax rate is currently at 6.75 percent.

According to the Tax Foundation, “these high prepared-food taxes are sometimes justified as a luxury tax intended to target higher-income individuals, although the wide diversity of takeout dining options suggests that such a tax is poorly targeted to achieve that goal,” and data collected by the US Bureau of Labor showed that 44 percent of food spending was food away from home in 2018.

While it’s true that people who eat out tend to be younger and wealthier according to the CDC, “one could say that it is a tax on individuals with less flexible schedules or who do not like to cook – rich or poor,” the Tax Foundation argues.

“Just kinda putting that out there,” Abuzuaiter said, adding a comment about Cary, a town moving forward with plans to build a $193 million sports complex that is “surpassing us by leaps and bounds,” according to Abuzuaiter.

The prepared food tax “could be for a lot of the things we’re talking about,” Abuzuaiter added.

“It is something that we have been looking at. Not saying we’re ready to propose and bring it but it’s something that we all need to think about,” Abuzuaiter concluded.

Vaughan acknowledged Abuzuaiter’s suggestion, saying that she has been looking at the tax burdens of other large cities and added that Greensboro compared to others, is “missing out on so much” because the other cities are “looking at different income streams or they get different support from their county.”

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