Asheville may be Global Traveler’s Favorite Foodie City, as interim City Manager Cathy Ball pointed out at a City Council work session on Nov. 27. But when it comes paying for the streets, sidewalks and emergency personnel that culinary tourists and other nonresidents use, she said, Asheville’s citizens are too often stuck with the tab.
“This is the struggle this community is having at this point in time,” Ball said. “You have this influx of nonresident population that we’re serving during the day, but the bulk of the cost of those services is being paid for by the property taxpayers.”
To tip the financial balance in a fairer direction for those who live in the city, Ball proposed two new taxes for Council’s consideration. The first, authorized under a state law that allows local governments to levy a tax specifically to support “public transportation systems,” would add a quarter-cent to all purchases made in Buncombe County. The second, a 1 percent tax on prepared foods and beverages bought in the city, could be used as general funds. Both taxes would require approval by voter referendum, projected to take place in 2020.
The transit sales tax would have to gain support from the Buncombe County Board of Commissioners, which has the power to request the referendum under state law. Ball explained that the city would partner with the county to update the recently completed Transit Master Plan, adding bus routes into outlying areas and improving the county’s Mountain Mobility service, which provides transit for people with disabilities.
Ball noted that the higher sales tax would disproportionately affect low-income residents, who spend a greater percentage of their income on basic needs, but she said it would benefit people with transportation barriers. According to a 2013 passenger survey conducted by the ETC Institute, 68 percent of Asheville’s bus riders make less than $20,000 per year.
Asheville would need to go to the N.C. General Assembly for permission to hold a referendum on the prepared food and beverage tax. That enabling legislation would set limits on the money’s usage, but Ball gave as an example spending to promote “increased cleanliness in business districts that have a lot of restaurants,” better public safety and improved sidewalk maintenance.
Although Ball estimated that roughly half the proceeds of this tax would come from tourists, Council member Sheneika Smith asked about its impact on the working poor, whom she said often rely on prepared foods. The city’s proposed strategy of earmarking funds for food security, she said, was out of step with the reality for many low-income families.
“I don’t think it really has as much to do with food security as it has to do with convenience, because people who are working all the time don’t have time to prepare their food,” Smith said. Ball responded that the plans are in the early stages, and the city would develop more detailed approaches with community partners.
Also responding to equity concerns, Council members Julie Mayfield and Keith Young both suggested that the tax be adjusted to target only alcoholic beverages. “We have a lot of people who come here to drink beer — sorry to all of our brewery friends,” Mayfield said.
Absent from Ball’s presentation was any proposal to lobby for changing the allocation of Buncombe County’s 6 percent room tax, which is administered by the quasi-governmental Buncombe County Tourism Development Authority. According to state law, 75 percent of that money must be spent on marketing, while 25 percent goes to a Tourism Product Development Fund to pay for capital projects that increase area visitation.
The decision to focus on strategies other than seeking a slice of the room tax pie, Ball told Xpress after the work session, was tied to a tentative agreement between the city and the BCTDA that would allocate $5 million from the TPDF annually for 10 years. The money could fund projects such as sidewalk improvements, renovations to the U.S. Cellular Center and downtown placemaking. Ball estimated that $1 million of TPDF money would still be available each year for projects by county government or community organizations.
Council directed staff members to continue their exploration of the new taxes, but Mayor Esther Manheimer acknowledged that the measures would not be a perfect solution to the city’s revenue needs. “We don’t have a scalpel to try to tax visitors,” she said. “We’re limited in our tools, so we’re trying to find the tools that best reapportion the tax burden for folks living and visiting in Asheville.”