‘It’s a burden’: Local food business owners push back against idea of 1-percent food tax

Featured photo: Machete owner Tal Blevins poses outside of the restaurant during the pandemic. (photo by Todd Turner)

On July 17, mayor of Greensboro Nancy Vaughan held a meeting to discuss the possibility of a countywide 1-percent prepared food and beverage tax with local restaurateurs after requesting their presence in a July 10 email. 

A slide from the July 17 presentation obtained by Triad City Beat states that the purpose of a 1-percent prepared food and beverage tax is to “fund new capital investments for the arts, entertainment, sports and tourism in an equitable manner that will benefit all residents of Greensboro and Guilford County.” 

Vaughan told Triad City Beat that this tax money could go toward “improvements” and “maintenance” for the city’s assets like Bryan Park Soccer Complex which, according to the mayor, is “beginning to show an awful lot of age.” Greensboro’s share of the tax’s revenue could also go toward an exterior renovation for the Greensboro Coliseum, the Grasshopper Stadium, International Civil Rights Center & Museum and more, according to Vaughan’s presentation.

However, many local food business owners remain skeptical at best about the proposal.

TCB spoke to restaurant owner and attendee Tal Blevins, who helms Machete’s fine dining experience as well as the forthcoming Yokai. Machete was a James Beard semifinalist in the category for Best New Restaurant last year.

According to Blevins, Vaughan’s presentation was informative. Blevins also said that while he thinks encouraging people to visit Greensboro is a good thing, he doesn’t believe the ends justify the means. 

“I was glad to get some information about it, but things are still very cloudy for me,” Blevins said. “It just seems odd to me to focus on the one industry that’s been hit the hardest over the past three years to try to bolster another industry, especially for a lot of city-run, government-run facilities.”

The Bodega — a sandwich shop, bar and convenience-store hybrid — opened its doors downtown right before the pandemic hit. Co-owner Daniel Leonard said he doesn’t feel like it’s been clearly explained enough to consumers “what’s really going on and why they’re imposing this tax.”

“All they see is a 1-percent added tax on the check, and of course since we’re the ones who print the check and give you the service, we’re the ones who seem like we’re charging you this tax,” he said. “It makes it look like we’re the ones imposing the tax on all the consumers when it’s really the city.”

During the meeting, Vaughan made an argument about the tourists that contribute to the city’s restaurants.

“They’re using our facilities,” she said. “They’re coming into our restaurants. Why shouldn’t they help — just like in Raleigh and Charlotte and Cumberland — why shouldn’t they help us pay for some of those events?” 

Vaughan’s claim that the tax will mainly affect the pockets of tourists doesn’t sit well with Blevins. 

“It’s ludicrous to me to say something like, ‘This is going to be funded by people coming from the outside.’” 

Instead, Blevins described the service and food industries as a pyramid. 

“The base of that pyramid are your quick-service restaurants like Bojangles, Biscuitville, Cookout, McDonalds, Chick-fil-A, those are the restaurants that get the most traffic and get the most people,” he said.

He argued that the tax could affect Greensboro’s residents who are just trying to make ends meet. 

“A vast majority of those are going to be locals, people grabbing a quick bite to eat, people getting off work trying to get some food for their family,” he said. “Especially for the poor and working class who are looking for inexpensive food, just to be able to get something on the table after they’ve been working an 8-12 hour day. It’s by far a bigger majority of the local residents that are going to be paying this tax to then fund event centers and arenas that oftentimes these working-class folks can’t even afford to go to. They can’t afford a $300 concert ticket.”

It’s different at a place like Machete, Blevins said. 

When people visit Machete, they’re prepared to pay a higher price, Blevins said, noting, “We’re a fine dining destination restaurant. When people come in from out of town for sporting events, concerts, we’re a destination for them.”

Veneé Pawlowski, pastry chef and owner of Black Magnolia Southern Patisserie, told TCB that she’s stayed up to date on the possibility of the tax since word got out about it. 

“I don’t think it’s in any way fair to small business owners who are already having to deal with increasing food costs,” Pawlowski said, adding that she tries to price her goods affordably, “while still focusing on maintaining quality and turning a profit to stay operational.”

What’s next?

While city officials have called these meetings preliminary, several meetings already occurred last year between city and county officials as well as major power players and business moguls. 

“If you’re doing this in secrecy, man, that’s gonna be some bad blood,” Blevins said.

Vaughan has stated that there will be a number of meetings over the next couple of months, asserting, “I think saying it was done in secrecy is kind of ludicrous.”

Emails between power players and government officials show interest in passing the prepared-food tax without a voter referendum. 

In one of the emails analyzed by TCB, Greensboro Coliseum Managing Director Matt Brown wrote, “We are compiling information to present to our Committee such as: a listing of Cities/Counties within the State who have enacted this tax (WITHOUT THE NECESSITY OF A VOTER REFERRENDUM [sic]), the legislation models used by Wake County and Mecklenburg County/Charlotte; and the intended limited purposes of the benefits of this funding source.” 

Vaughan’s presentation also noted competition with the facilities in Wake and Mecklenburg counties.

“If we want to compare ourselves to Charlotte… to Raleigh,” Blevins said, “Then you’re going to have to be as competitive with your tax policies as you are with the expediency and cooperation and partnership of government,” adding that while it took the city 15 weeks to approve his building permit, his friend in Charlotte got theirs approved in one.

“There are a lot of small-business owners that are very frustrated with how slow and lacking governmental resources [are]. And I’m not just talking about money, I just mean access to people getting permits approved, even to start construction, getting inspectors out,” Blevins said. “It’s a burden on small business owners, and especially on underserved communities and minority business owners to have to deal with a government that is so slow. Because time is money.”

Blevins doesn’t think that a referendum will work. Durham County made the adoption of a prepared-foods tax in 2008 contingent upon voter approval in a referendum, but voters rejected the imposition of the tax. When asked in June if a voter referendum would be used to pass the tax, Vaughan didn’t give a clear answer. 

“I would say everything’s on the table, but again it’s gotta be right for the city, for the county,” she said. “There are just a lot of moving parts, and we’re just not there yet.”

For local businesses like Blevins’ and Pawlowski’s, the tax isn’t right for them.

“As a very new business owner, this makes me very uneasy,” Pawlowski said. “It doesn’t seem at all supportive of the many small local businesses that help make Greensboro an ideal place to live.”

Blevins also stated that he doesn’t see how placing the burden of a prepared food tax on the service industry is an “effective way and a fair way” to support Greensboro’s facilities and amenities.

“It really is your local businesses and especially restaurants and bars that give — sorry for the pun — that little old flavor to any area,” Blevins said.

View the presentation by the city here. The next city council meeting takes place on Wednesday, August 2 at 5:30 p.m.

Read previous reporting about the prepared-food tax here.

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