House bill would permit Richmond to enact tax

Diners paying for restaurant meals in Richmond could soon help foot the bill for community improvements if the city enacts a food and beverage tax.

State Rep. Brad Barrett, a Republican, authored House Bill 1596 that would permit Richmond to implement a food and beverage tax. It would add up to a penny per dollar to the costs of food and beverages “furnished, prepared or served for consumption at a location or on equipment provided by a retail merchant” within the city. The bill has been referred to the House’s Ways and Means Committee.

“We’re talking about it,” Mayor Ron Oler, also a Republican, said about the tax. “It’s something that the city’s been talking about for quite a while. The first step is to work through the state legislators, then I’ll come back to council to decide when and where to act upon it.”

A report by the Legislative Services Agency’s Office of Fiscal and Management Analysis estimates the city could raise about $900,000 during 2026 by implementing the tax. Oler said about 40% of the total would be paid by out-of-county diners.

Barrett’s bill provides some limits on how the tax dollars could be spent: to promote conventions, visitors and tourism; to promote economic development; for parks and recreation, including trails; for activation of the gorge; and for bonds or leases. Oler said the city has projects that need a source of funding, including an elaborate activation of the Whitewater Gorge Park. Residents were recently asked to prioritize three project lists in an online survey.

Enacting the tax may also be a prerequisite to receiving other kinds of state funding. “State legislators are making it difficult to do some things without all these taxes,” Oler said. “They keep telling us until we enact all the taxes they’ve given us, they’re not interested in revisiting the property tax caps.”

Hoosier voters approved adding property tax caps to the Indiana state constitution in the 2010 general election with 72% indicating support for the measure. The change was aimed at increasing household income, creating jobs and relieving some burdens for working families, but was met with concern about harming communities already having difficulty funding basic services. Cities have pursued creative alternatives to try to make up for lost funds.

Wayne County has been eligible to implement a food and beverage tax, but has chosen not to do so. If the county had added the tax, Richmond and the county’s towns could have enacted the tax and claimed the collected revenue from establishments within their borders. A recent change in Indiana law now enables the city to seek the tax on its own. Oler said the other counties and cities along Interstate 70 have already implemented a food and beverage tax.

“I’m not in favor of a new tax, but we have to find a way to fix some of these issues we have, and that’s one of the tools they’ve given us,” Oler said.

Larry Parker, who was elected president of Richmond Common Council on Jan. 21, said council has not discussed enacting a food and beverage tax.

“There’s been no formal discussion on that,” he said. “I’m sure that some of us would be for it, some of us would be against it. I have no idea, if it were to come as an ordinance, what the vote would be, whether it would be positive or negative on that.

“I personally hate to see any additional taxes,” Parker said. “I do understand we can always use the revenue. Unfortunately, it seems like we can always use revenue, but if it’s not available, we still get by.”

Jeff Plasterer, president of Wayne County’s commissioners and a former county council member, said that there’s been back-and-forth discussions for years between the city and county about the food and beverage tax. He said his feeling has always been that there needs to be a plan before considering the tax. He compared it to the county’s Hoosier Enduring Legacy Program planning for American Rescue Plan Act dollars.

“It’s a tax, and it only should be imposed if there’s a need for it and it’s something that we can articulate,” Plasterer told WWN on Wednesday, Jan. 22.

County officials are closely watching this legislative session for changes to property tax and other funding for counties. Plasterer said proposed changes could cost the county between $6 million and $9 million per year in property tax revenue. That’s up to about a quarter of the county’s general fund budget, and could spur county leaders to examine alternative revenue sources. Thoughts about any new county taxes would result from the legislature’s actions.

Plasterer also said the state is considering an eligibility change for the Community Crossings program that has provided money for county, city and town road projects. The state could make the money available only to counties that have implemented a wheel tax. Wayne County does not have the wheel tax.

“If that is at risk, we’re probably going to need to look at weighing the wheel tax,” Plasterer said of Community Crossings money, “and we know that that’s one area where inflation has just been eating us alive.”

With the HELP initiative winding down, a new countywide planning process is beginning through the Wayne County Foundation, with increased participation from the county’s towns.

“I support having a plan,” Plasterer said. “What does the future look like in our minds? Does the community buy into that? And, if they do, then those are things we need to try to accomplish and figure out how we’re going to pay for them.”

While commissioners could vote support for a new tax, Wayne County Council must enact it. Commissioners Brad Dwenger and Aaron Roberts both said they do not support a new tax.

“My philosophy is: I am not going to implement a new tax unless there’s a need and we have done everything we can to cut costs,” Dwenger said. “You’re talking about taxpayers’ money, and it has to be spent responsibly.”