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Meals tax critics stage tea party on Providence River

March 22, 2012

PROVIDENCE — Invoking the tactics, the slogans and in some cases the costumes of Colonial America, opponents of Gov. Lincoln Chafee’s 2 percent surtax on restaurant tabs tossed bags of tea into the muddy, mostly drained Waterplace Basin on Wednesday.
Declaring that Rhode Island suffers “taxation without competent representation,” the protesters decried the negative effects they believe the tax would have not only on restaurants, but on the entire economy of the state.
The state already imposes an 8 percent tax on meals and beverages in restaurants, with 1 percent of that amount going to the community where the restaurant is located. In his 2013 budget, Chafee has recommended hiking that tax to 10 percent – a 25 percent increase – with the hope that the money would be used by the General Assembly to increase the funding of the formula by which state aid to local school districts is distributed.
Dale Venturini, president of the RI Hospitality Association that sponsored the rally and is engaging in a “10 percent is 2 much” campaign, said the use of the tax proceeds for education is not a sure thing.
“It’s intended on going that way,” she said, “first it will go into the general fund.”
Venturini noted that “In 2003, the 1 percent tax was added. I was there at the Statehouse when that was added and the testimony was that money is going to go to cities and towns so they could offer property tax relief to their constituents.”
That drew laughs and hoots from the just under 100 people – many of them restaurant owners and workers -- who had gathered at Waterplace Park for the event.
“So I ask you,” she continued, “have any of your property taxes gone down since 2003?” The response was a uniform shout of “No!”
“We can’t raise our prices 25 percent,” Venturini said, “none of us have received raises of that amount, so this is where it’s got to end. We as an industry will continue to help create jobs. We are an industry that brings people in for a year or a career and we want to continue that.”
Michael Stenhouse, CEO of the RI Center for Freedom and Prosperity, (RICFP) claimed that with all the different sales tax measures in Chafee’s proposed budget the administration hopes to realize $95 million in revenues, but will only collect $35 million because of decreased economic activity. He asserted that “1,400 private sector jobs will be lost, municipalities will lose almost $10 million in commercial property taxes, state GDP (Gross Domestic Product) would drop by a percent and investment in the state would also drop by $27 million. Does this sound like a tax plan that works for you or works for Rhode Island?”
Stenhouse promised that the RICFP would release a report next month detailing how Rhode Island can completely eliminate its 7 percent sales tax to “0.0.”
Susan Wynne of the RI Tea Party declared, “Enough is enough, we are taxed enough already.”
“Why do we keep electing the same people over and over again?” Wynne asked. “The days of my friend’s cousin is running for office and I have to vote for him or her needs to come to an end in Rhode Island.”
Chafee has said that if the May Revenue Estimating Conference projects increases in state revenue, it may be possible to withdraw the restaurant sales tax plan.
The organizers felt obligated to inform the media in advance of the event that, “The tea will be in container -- mimicking a tea bag -- which will be retrieved at the conclusion of the rally. No loose tea will be deposited in the water.” A press release said they “have been working closely with the Department of Environmental Management during the planning stages to ensure that all rules and regulations are followed.”

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