LOUISVILLE, Ky. (WDRB) -- Louisville is known as a foodie town, but it could soon cost more to eat out.
Metro government is hungry for revenue, because the spiraling cost of public pensions is eating the budget. So city officials are looking to restaurants to help feed its cash-starved budget.
“It means less police officers, less EMS units, less firefighters,” Metro Council President David James said.
Local leaders believe the city's signature restaurant industry can help serve up a solution. The city would like to charge restaurants a tax of up to 3% on their food and beverage sales, raising about $40 million a year.
“If we were able to do that, it would take care of almost the balance of the problem we have in terms of annual pension funding,” Louisville Mayor Greg Fischer said.
Kentucky law allows smaller cities to impose restaurant taxes but not Louisville or Lexington.
City officials are trying to convince the General Assembly to change that. They argue a restaurant tax is a good option, because tourists also pay.
“We have a chance to offload part of that cost onto people that don't even live here, and so it is attractive in that way,” James said.
T. J. Oakley, operations director of the Bristol Bar and Grill, said restaurants already pay a 6% sales tax, and adding another helping of taxes could cause serious heartburn.
“Tourists would be paying part of that revenue, but the fact is 100% of Louisvillians would be paying for that as well,” he said.
Oakley said many restaurants run on razor-thin margins, and higher taxes would mean higher prices on the menu.
“Ultimately, it would decrease our business,” Oakley said.
James said the restaurant tax is more fair than other proposals such as raising the tax on insurance premiums, which the council rejected last year.
”It's more of a luxury tax. You go to a restaurant because you want to,” he said. “We have to do something in order to bring in new revenue to our city in order to protect our citizens and serve our citizens with basic services.”
Oakley agreed but called the proposed tax a “careless” option.
“To ask for restaurants and restaurant employees and single moms and working families to be the ones that carry the price for that whenever there could be more responsible spending within the government, I think that's a stretch," he said.
A bill that would allow the restaurant has not yet been filed.
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