News & Observer | newsobserver.com | Durham may get to vote on foods tax

Published: Apr 18, 2008 12:30 AM
Modified: Apr 18, 2008 03:04 AM

Durham may get to vote on foods tax

Getting it on the ballot would be a start; Rep. Paul Luebke has yielded on the point

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DURHAM - Advocates of a 1 percent local tax on restaurant and bar bills, which is likely to go to a referendum in November, are counting on the likes of Michelle Stanback.

Durham lawmakers agreed Thursday to submit a bill when the legislature convenes next month that would authorize putting the new tax to a vote, a burst of progress after ideological differences stalled the effort for years.

The estimated $5 million a year the tax would generate would go to projects aimed at drawing more tourists to Durham, such as a large-scale renovation of the city's civic center.

"I'm all for it," said Stanback, a real estate agent, as she sipped white wine at a specialty food store Thursday afternoon.

"I like to see good things happening in Durham, and you've got to pay for them somehow."

But the referendum, if the full legislature allows it to go forward, might face opposition from both right and left.

A state anti-tax group already is vowing to campaign against the tax, and a local coalition of progressives might follow suit, though for different reasons.

The fact that a referendum could happen at all was something of a breakthrough.

State Rep. Paul Luebke, a Durham Democrat, has blocked city and county leaders' past efforts to get state authority to levy the tax, arguing that poor people would be hurt by it disproportionately.

But he yielded during a joint meeting of city, county and state leaders Thursday morning. He agreed to submit a bill in the General Assembly that would give permission for a referendum on the long-debated issue.

"We have an impasse," Luebke said after reiterating his objections. "A referendum is appropriate."

The gust that blew through City Hall right after that was from city and county leaders exhaling a long sigh of relief. Many had expressed frustration that Luebke had been, as City Council member Mike Woodard put it, a "one-man veto."

"We appreciate this," Mayor Bill Bell said.

Even if the measure makes it to the ballot Nov. 4 -- something that still will require the consent of the full legislature -- passage is by no means a done deal.

A county poll taken this month showed that a tiny majority, 50.4 percent, would support the prepared-foods tax, said Ellen Reckhow, chairwoman of the Durham County commissioners. She noted that a 2003 study found the tax would cost the average Durham County resident about $18 a year.

But there are groups lining up against it.

Dallas Woodhouse, president of the North Carolina chapter of Americans for Prosperity, said the city should shift its priorities rather than looking for other revenue sources.

He called items such as improving the civic center "wants and not needs."

Chris Kukla, president of the liberal Durham People's Alliance, said his group had not taken a formal position on the referendum and would have formal discussions.

The alliance has opposed the tax in the past because of its regressive nature.

"I would be surprised if we would come out in support of a prepared-foods tax as a way to provide the income for these projects," Kukla said.

Woodhouse, whose organization helped defeat a similar tax referendum in Monroe last year, said the city should look to property taxes if leaders feel more money is needed.

"Property taxes are enormously transparent," he said. "Things like a meals tax are meant to hide the cost of government. You pay it in dribs and drabs rather than getting a tax bill every year.

"If their feeling is the public would not take a property tax increase as palatable, the answer is not to find another tax. The answer is to not spend the money."

matt.dees@newsobserver.com or (919) 956-2433
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