CLARKSVILLE, Ind. (WDRB) — A proposed 1% food and beverage tax could bring new revenue to Clarksville as the town works to make up for money lost through changes to Indiana's property tax system.
A couple of years ago, Indiana property owners received a property tax break. But for local governments like Clarksville, which rely heavily on property tax revenue to fund public services, the changes have created a new financial challenge.
With less property tax revenue coming in, the town is looking for ways to pay for fire trucks, police cruisers, city vehicles, employee salaries and other expenses.
That has town leaders looking to local restaurants and other businesses that sell prepared food.
The Clarksville Town Council is considering a 1% tax on prepared food and beverages, which would add one cent to every dollar spent.
The tax would apply to restaurant meals, bars, food delivery, catering orders and ready-to-eat grocery items. Regular groceries would not be taxed.
Town officials say the money could help take some pressure off the town's operating budget and support its Capital Improvement Plan, including projects such as road repairs, sidewalks and parks.
"There are a lot of things we can use this for," said Glen Adams, Clarksville's interim town manager. "This will put some of the strain we have in our budget away, and we can use the operational funds we have for operational needs."
The proposal comes as administrators work to balance the town's budget. The financial pressure has even led to concerns about potential firefighter layoffs.
A 1% food and beverage tax is not a new concept in Indiana.
The tax was first introduced in 2005 and used in Indianapolis and surrounding "donut counties" to help pay for construction of Lucas Oil Stadium. State lawmakers later allowed similar taxes to be used by other municipalities.
Clarksville would need the Indiana General Assembly to approve the tax before it could take effect.
The Town Council has not yet taken a final vote on the proposal.
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