Town Tax Opposition Gathering Momentum

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Local restaurateurs who had gathered Monday to refine their opposition to a proposed bed, board and booze tax were joined by town councilmembers and concerned customers in the Manzanita Apartments community room.

More than 50 people including councilmembers Hoby Herron, Jim Spencer and Bryan Siverson and Vice Mayor Dick Wolfe engaged in a spirited and often contentious debate over a proposed 2-percent tax increase on restaurant and bar tabs.

The proposal would reduce Payson's bed tax on hotel rooms from 3 percent to 2 percent, while simultaneously creating a 2 percent levy on restaurant and bar sales. If implemented, the tax on local restaurant, bar and hotel bills would become 10 percent.

Small Cafwner Todd Zelinski, who chaired the meeting, allowed the councilmembers in attendance to make opening statements and explain their positions. Spencer, who proposed the tax at a special council meeting last month, began with a question: "Did we do this to make you mad? You know that's not the truth."

He then explained that the residents who participated in last year's Payson Town Hall produced a "laundry list of things people wanted." On that list was a community recreation center, swimming pool improvements, and covered seating at the Payson Event Center.

"The idea of the bed, board and booze tax isn't something that we got together in a sinister way and said this is a good way to mess over our restaurants," Spencer said. "Two-thirds of the cities and towns in Arizona have a sin tax, which is bed, board and booze ... so we put this on the table."

If the money is spent properly, he said, it will help restaurants rather than hurt them.

Under the proposal, he said, the bill for an omelet and coffee at Country Kitchen would increase from $8.94 to $9.11 a difference of 17 cents.

Town Manager Rich Underkofler said he plans to introduce a measure Thursday calling for the town attorney to draft a resolution restricting how the new tax revenue could be spent. If approved, that resolution would call for half the money to be spent on capital projects such as a new community center, 25 percent for tourism development, 15 percent for community beautification and 10 percent for maintaining facilities and programs impacted by tourism development.

Wolfe told the audience that the process for approving the new tax requires two public hearings, the first of which will be held during Thursday's town council meeting. The second hearing will be held at the March 22 council meeting. "I've not made up my mind at all on this issue," he said.

The vice mayor also said he had received many calls and e-mails on the subject, but that nobody he had talked to had any idea how the additional revenue estimated by the town to be about $450,000 a year would be spent.

"I said, 'Maybe you need to find that out. Maybe it's going to go for a community and youth center that a lot of people in this town want.'"

Siverson said he also hadn't made up his mind, but that he thinks residents support a new community center.

"I looked at this tax from the beginning as a way to build a community center a youth center," he said. "Maybe we don't have the right formula. Maybe there's a way to work out a compromise."

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