Restaurant Owners Plan To Fight Proposed Meals Tax Hike

They fear raising the tax to 10 percent will send customers across the border.

Ask Roger Savini about Statehouse plans to boost the meals and beverage tax from 8 percent to 10 percent, and he can't help but raise his voice.

"I can hit a golf ball into Massachusetts from my parking lot," says the owner of Savini's Restaurant on Rathbun Street. "And over there the tax is only 6.25 percent. If this passes, someone spending $100 a week dining out could save enough in a year by crossing the border that they could eat free for a week."

He's not the only one opposed to the state squeezing more revenue from restaurant customers. Across the state, owners of taverns and eateries are speaking up in opposition to the proposed increase, part of Gov. Lincoln Chafee's $7.9 billion budget plan for the upcoming fiscal year. The governor is trying to sell the tax hike as a way to raise funds — an estimated $38.5 million — for public schools across the state, but that hasn't mollified opponents.

They argue those who eat out in Rhode Islander are already paying a higher tax than they would in neighboring states. In Connecticut, the meals and beverage tax is 6.35 percent, and in Massachusetts, it's just 6.25 percent, with cities and towns having the option of tacking on .75 percent more.

The Rhode Island Hospitality Association, which represents those businesses, is already organizing a campaign to fight the hike. "Ten percent will put our restaurants at a competitive disadvantage," says Dale Venturini, the group's director. "We didn't get the state into this situation."

In some Ocean State establishments, the paper table toppers that usually inform diners about specials now offer a political message. They list the names and phone numbers of Statehouse leaders, and urge customers to make a call. In the coming week, waiters and waitresses could be passing out leaflets along with checks.

"This will be a campaign with a lot of different moving parts," Venturini says. "We'll be doing different things every week. We want to get people engaged."

The drive is already catching fire in Woonsocket.

"Our guests aren't happy at all," said David Gouin, a partner and manager at River Falls, a downtown restaurant and bar. "I can't tell you how many have approached me to say they don't like the idea. And it could really impact any place that has function space. If you're planning an event that costs, say $2,000, a 10 percent tax could add up. Some people are going to see that as a reason to hold their functions in Massachusetts."

At Ciro's Tavern on Cherry Street, another restaurant owned by the Savini family, managers voice the same concern.

"If you're paying $3,000 or $4,000 to feed people at a wedding, we're not talking about a couple of bucks any more," says Gina Savini, Roger Savini's daughter. "If people can cross the street to Massachusetts and save 3 or 4 percent, why would they stay here?"

"My big concern is, when will it stop?" asked her sister, Jill Moylan. "If they go to 10 percent this year, will it be 12 percent the next? Will it be 20 percent in a few years? Restaurants are one of the few industries creating jobs right now. Should they really be going after us?"

At Chan's, the Chinese restaurant and music club on Main Street, owner John Chan is speaking up, too.

"I'm with my colleagues — against the increase," he says."We're at 8 percent already, and we're a border town. We compete with places in Bellingham, Blackstone and Franklin, where the meal tax is around 6 percent. People will still come here, but it could discourage some. I'm also concerned people will take the extra two percent out of the tips they leave the wait staff. Not only would I be hurt by this, but my employees, too."

Owners and managers at some of the city's smaller establishments say they haven't had the time to learn that much about the proposed tax increase, but they're quick to add that they don't want to see their customers paying more.

"I don't really think it will effect my business because people want to eat good food," says John Yakut, owner of Sunrise Pizza on Social Street. "But people won't be happy. Woonsocket isn't a high-income community. Every day I hear customers talking about the economy. They're pinching pennies already."

"I don't think it will make much difference here," adds Susie Cheung, manager of King Wok, a family-run take-out restaurant on Clinton Street. "People will still want good food. But don't we have enough taxes already?"

One restaurant manager, however, says the industry may have to accept the hike. "With the horrible state we're in, people should be ready to give a little more, and 2 percent isn't too much to ask," said David Robinson, whose family owns Ye Olde English Fish & Chips. "I know customers don't like being asked to pay a little more, but this state and this city are struggling to keep their heads above water."

Though the tax hike plan has been pitched as a way to help public schools, that hasn't inspired much in support outside the restaurant business. In Woonsocket — a city struggling with recurrent school department deficits — education leaders are skeptical.

"This is not business-friendly," said School Committee member Chris Roberts. "Look back and you'll see that much of the money from the state lottery was supposed to go to education. Instead, it went into a black hole."

"I haven't really thought about, but I doubt the money will end up going to schools," adds Eleanor Nadeau, another School Committee member.

Christopher March 09, 2012 at 08:22 AM
Seeing how Ye Old English has been in business since the dawn of time (and perhaps earlier), I'm going to guess that their building is paid off. Maybe they can absorb the extra 2%. These other business cannot. Which would probably work out well for Mr. Robinson, as there would be less competition. Nothing against the guy, and I love the food there, but enough is enough with the taxes.
English first March 09, 2012 at 01:17 PM
Take out businesses won't be hurt as badly. Although the tax will go up those businesses also, they aren't sit down businesses , and patrons don't have to tip on top of tax. Support your local businesses. They are our friends and neighbors. Don't go to the big chain restaurants. Whenever you can go to the local restaurant and support northern RI businesses. ( A bit repetitive, but you can see how I feel about local business).
John Larrabee March 09, 2012 at 04:31 PM
Local dinners and most other local restaurants always serve better food than you'll get at someplace like Applebee's or Domino's,
Rtc June 05, 2012 at 05:29 AM
If the governor & the general assembly are so concerned(?????) about funding for education,let's see the budget for welfare & illegal benefits & start cutting there. The working taxpayers are strapped with a budget of $500-$700million p/year for the medical care, housing,food & now cell phones for those on state aid.Now the idiots that run our government what to tax the food industry more. The tax increases don't affect them, they raise the taxes on something else. They don't care if people go to Ma,Ct,NH to save money,they'll still get their share of the states revenues & more. After 70 years of democratic leadership, RI is in the toilet & will never recover anytime soon. If our leaders don't think RI's are shopping in Ma,just go there & see how many cars have RI plates. They are all POS.Vote in November. RTC


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