JACKSONVILLE — Passage of a proposed ballot measure for a 5 percent food and beverage tax might send the Back Porch Bar and Grill packing two decades after it left Ashland when a similar a meals tax was instituted.
“When the meals tax went through and we all saw the drop, that’s when we decided to go somewhere that was more fertile,” said Blu Collins, whose father owned the restaurant at the time. Collins said Back Porch and other Ashland restaurants suffered about a 10 percent decline in business after the tax was instituted in 1992.
Measure petitioners are proposing the meals tax to replace a $20 monthly surcharge on utility bills to fund police department operations. The City Council approved a second reading May 15 of the ordinance setting the surcharge, which will go into effect July 1. Organizers estimate a meals tax would raise as much as the $400,000 projected annually from the surcharge.
Petitioners received a letter from the city Monday giving them the go-ahead to start collecting signatures, said Doug Phillips. A total of 366 signatures are need to qualify the measure for a vote. Phillips said the organization’s internal goal is to have enough signatures collected by July 1 to allow time for submission to the city and county verification by mid-August to qualify for the November ballot.
“We are pleased with what we are seeing,” Phillips said Thursday about the initial effort.
People who support the city’s restaurants would be forced to pay the tax if it’s approved, said Collins. Everyone who lives nearby and eats at the restaurant regularly might compensate by visiting 10 percent less often, he predicted.
“We’ll pack up and leave and try to find a better location that suits me better again,” said Collins. He says state minimum wage raises have force price increases, and a city tax would put more pressure on the business.
Jacksonville Inn owner Jerry Evans says he definitely thinks a meals tax would affect the food businesses in town. Patrons who live outside of Jacksonville may well stay in their own cities or go elsewhere in the valley to avoid the tax, said Evans.
“There are so many factors involved anymore,” said Evans. He questions the assumptions made by the petition organizers, who counted the number of seats in the restaurants in town, assumed revenues and calculated the tax would raise enough to equal the surcharge.
For restaurants of 25 seats or fewer, Phillips generally assumed they would fill each seat twice per day. For the Jacksonville Inn, Phillips used only 125 of its 288 seats, assuming those would be occupied twice per day.
But Evans said the day before a public meeting was held by petitioners, the restaurant sold only 33 meals. There are about six days per year, Mother’s Day being the most recent, when Jacksonville Inn serves more than 600 meals.
Evans says he has been told by out-of-town diners they don’t go to Ashland because of the meals tax. Other owners have heard similar comments from patrons, Evans said. A number of banquets are held at the inn, and Evans worries organizers of those larger events may look elsewhere if a 5 percent tax is approved.
Counting on tourists to provide a significant chunk of the predicted revenue is also a questionable assumption, said Evans. He noted while Ashland has nearly 400,000 attendees at the Oregon Shakespeare Festival, the Britt Festival’s attendance was 63,000 last year.
“Britt Festival gives a boost, but a high percentage of the folks that eat here could eat outside Jacksonville also,” said Evans.
Phillips announced the effort in late April. He served on the city’s Budget Committee, which looked at a variety of alternatives to fund the police department during a yearlong study. A meals tax was eliminated from consideration early in that process and the committee recommended the five-year utility fee surcharge over a tax levy. A town hall session to explain the surcharge was held of March 31 prior to a 6-1 council vote April 17 to create the ordinance.
Under the proposed initiative, restaurant owners would receive 5 percent of the tax collected to cover administrative costs. The city would get 2 percent to cover its costs.
Tony Boom is an Ashland freelance writer. Reach him at email@example.com.