New restaurant tax agreement hits several snags

August 21, 2018 11:04:59 AM

Slim Smith - [email protected]


The odds of getting a new restaurant sales tax in Columbus in place by the end of the year appear to have gotten longer as a dispute between the city and county over a separate issue continues. 


When the county-wide 2-percent restaurant sales tax that had been in place since 1987 expired on June 30, local officials pressed to come up with a replacement they hoped would be addressed during a possible special session of the Legislature. Gov. Phil Bryant announced last week he will call the special session to begin Thursday, but it is considered unlikely that the restaurant tax will be taken up. 


Now, it appears to be a moot point. 


After city, county, Columbus-Lowndes Convention and Visitors Bureau and Golden Triangle Development LINK officials met and agreed on terms of a new tax Friday, Columbus Mayor Robert Smith said he will not present a resolution supporting the restaurant tax to the city council unless the county agrees to give the city $600,000 in tax revenue paid by city residents for parks and recreation.  


The county had previously resolved to share the funds with the city for three years (2018, 2019 and 2020) in the wake of the joint Columbus-Lowndes Recreation Authority splitting in October into separate organizations for the city and county, respectively. 


Supervisors last week approved $200,000 in revenue be directed to the city for parks/recreation for 2019 only. They did not appropriate the funds for 2018. 




The working tax agreement 


The agreement reached Friday on the restaurant sales tax came after a meeting at the CVB office that included Smith and City Attorney Jeff Turnage, Lowndes supervisors Harry Sanders and Leroy Brooks, CVB Director Nancy Carpenter and Board President DeWitt Hicks, and LINK CEO Joe Max Higgins.  


It calls for $400,000 to be provided to the city for its parks/recreation, $300,000 to the county for parks/recreation, $250,000 for the LINK for economic development and the rest for CVB for tourism. The tax raised about $2 million in Fiscal Year 2017. 


There are some new wrinkles, however, most put in place to assure the tax could win voter approval if a vote is required. 


The tax would apply only to restaurants within the city limits with annual sales of $100,000 or more. The resolution will also ask the Legislature to include a "reverse repealer" instead of a referendum. The reverse repealer would require a petition signed by 2,000 registered voters in the city in order to put the tax to a vote. Without that, the law would go into effect after 30 days. 


Because the tax would apply only to city restaurants, the vote, if required either by referendum or reverse repealer, would be decided only by city voters. 


Under the agreement, the tax would be in place for 10 years. 




The parks problem 


Both the city and county must present identical restaurant sales tax resolutions to the Legislature before it can be considered there. 


Sanders called for a special meeting of the supervisors for Wednesday to consider a version of the resolution Turnage crafted containing the agreement reached Friday. 


"It's really up to the mayor and city council, or it will be after we pass the matching resolution on Wednesday," Sanders said. "We know what we're going to do. We're going to pass what we all agreed on Friday." 


The council did not discuss the sales tax resolution during its meeting Monday. But the mayor said he will support it if the county makes good on its parks commitment. 


"I thought we had an agreement," Smith said. "If the county would appropriate the money they had agreed on, $200,000 a year, we could move forward. But they reneged on it. 


"All the county has to do is to agree to do what they said they would do," he added. "Everything else is in place." 


Brooks said he plans to propose supervisors provide the city with $300,000 for FY2019 and FY2020 if it would break the impasse over the restaurant tax. 


"I'm to the point now where there has to be a decision to move on and get the restaurant tax passed," Brooks said. "We can't be hung up on the past problems. We have to move forward. I'm for whatever it takes to make that happen." 


Sanders said he doesn't plan to support Brooks' motion. 


If the county passes Brooks' proposal and the resolution on the restaurant tax, Turnage said the mayor is prepared to call a special session to present the tax resolution to the council. 




Unlikely special session item 


With the governor set to officially call the Legislature into special session, the prospect that the restaurant sales tax will be on the agenda appears less and less likely. 


Rep. Jeff Smith (R-Columbus) asked the governor in June to add the restaurant tax to the agenda of any called special session, but it appears the session will be devoted entirely to two big state-wide issues -- roads/bridges infrastructure and how to distribute BP oil spill money. 


Rep. Smith said he reached out to the governor though his chief of staff Monday. 


"Nothing else will be taken up until the transportation bill passes," Rep. Smith said. "It's not looking like the (restaurant tax) will be taken up."

Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected]