Business & Tech
Restaurant Owners Oppose Meals Tax
Town Meeting article proposes to raise the tax on meals by 0.75 cents.
The proposed tax of 75 cents on a $100 dinner does not seem like a lot, but Swampscott restaurateurs believe the town could not have picked a worst time to impose a new tax on their customers.
With rising gas prices and higher food costs and the economy only beginning to show a rebound, restaurant owners say the new tax is only going to push their customers to dine in Lynn or Marblehead.
“Those towns don't have this tax,” said Paul Petersiel, who owns the Red Rock Bistro on the waterfront. “Do we need more taxes? We are all struggling.”
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The 0.75 cent meals tax will be presented to the Town Meeting on Monday. Michael McClung, chairman of the Finance Committee, said the new tax is estimated to generate at least $120,000 to the town per year and with several new restaurants in town, it may be as high as $180,000. The funds would go to the town's general operating budget.
Petersiel said that estimate is much too high. A year ago, for a presentation he made to the Board of Selectmen, he estimated that the tax would generate only about $58,000. It may be higher now, but not more than double or triple, he said.
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“Town Hall is being fiscally irresponsible,” Petersiel said. If the town needs money, he suggested it sell off some of the “lousy” properties it owns.
Paolina Lepore, who owns Caffe Paolina, said, “No one likes to pay taxes, but what are you going to do?”
She agreed that the timing is bad with rising fuel costs that directly impact the restaurants' costs. She said it seems like “a little thing,” but a lot of little extra costs add up to a big increase in the cost of business.
Supporters argue that the meals tax is passed on to customers, some of whom are not Swampscott residents.
Petersiel disagreed. He estimates that about 75 percent of the local restaurants' customers are town residents.
Opponents have complained that the tax would only compound the problem for businesses in Swampscott that are already paying tax at twice the rate of that assessed on residences.
Lepore was resigned to the increase. “Maybe the town will spend the money on something good, fixing the roads,” Lepore said. “Or on the kids.”
