POLL: Raise Meal Tax 2 Percent?

Restaurant owners in Rhode Island have strong feelings about Gov. Chafee's proposal to increase the restaurant tax from 8 to 10 percent to help fund schools.

"It's in the budget already, so we're trying to get it out," said Bill Dessel of Billy's restaurant in Barrington and a member of the board of the Rhode Island Hospitality Association. "It may be the biggest outcry ever from the hospitality association."

No one connected to the restaurant industry favors it, Dessel said. The hospitality association is mounting a massive campaign to get it out of the budget, he said, including the hiring of lobbyists.

"It's an easy target," he said. "But that's a big difference, especially when competing against restaurants right across the borders of Massashusetts and Connecticut."

Those restaurants only have to charge 6 percent, he said.

"The border restaurants, the pizza shops will get hurt the most," he said. "And the convention business will suffer. We need to be competitive with Massachusetts and Connecticut."

Regional rallies against the tax hike are being formed, Dessel said.

"I'm circulating a petition at the restaurant," he said.

Christine Hunsinger, Chafee’s communications director, said the additional 2 percent in taxes would be funnelled back to cities and towns through the education funding formula.

“The governor’s been very clear and very committed to the cities and towns this year,” she said.

Chafee held a series of municipal strategy sessions with mayors and town managers to discuss how the state could help them. Accelerating the education funding formula — getting more money to those cities and town that had been underfunded in previous years — was something municipalities supported.

“This was one of the suggestions that came out of the meeting with the mayors. The idea of accelerating the funding formula came from the mayors," said Hunsinger.

"It’s not a broad-based tax," argued Hunsinger. "It’s a tax that hits disposable income. Property tax is the most difficult to pay. Those continue to skyrocket at the municipal level.... It’s really pennies on a pizza."

Those pennies could make a difference for servers in restaurants, in particular, said Dessel.

"I think they'll be hurt the most," he said.

Dessel said this consumption tax actually started at 1 percent. Now look where it's at, and the governor wants it to go even higher.

What do you think about increasing the meal tax?