Columbia City Council will have to take $1 million from unallocated meal-tax money next fiscal year if it wants to continue current spending levels for organizations that rely on taxes from restaurant and bar patrons.
If council does that for the fiscal year that starts July 1, it will fall a half-million dollars short of its goal of setting aside a 10 percent meal-tax reserve account, Columbia’s finance and budget leaders said in a memo to council members.
Council will grapple Tuesday with how to spend a projected $10 million it will receive in fiscal 2014-15 from the 2 percent “hospitality tax” on prepared meals and beverages. That decision is among a range of financial issues on council’s budget workshop agenda.
Cultural and civic groups that tussle over their share of the meal-tax pie will get a chance to speak on the volatile issue when council holds its annual public hearing on the budget later this month or in early June. Council will be asked Tuesday to change its current budget calendar, which at the moment calls for a June 17 final vote on the budget.
Last week, council adopted a pledge that it would not cut funding to meal-tax recipients as the city moves toward building a $35 million, minor-league baseball stadium by borrowing $29 million that would be repaid through meal-tax income. The balance of the cost would be made up by the company that is contracted to operate the ballpark as a year-round facility
John Whitehead, who said he speaks for 12 to 15 cultural organizations, said immediately after that vote that he is satisfied with council’s pledge.
Leaders of the city’s restaurant organization and the S.C. Restaurant and Lodging Association reviewed the budget memo Monday. They said they are accepting the city’s promise to protect cultural groups.
Bobby Williams, head of the Columbia Restaurant Association, said food and hotel organizations will monitor the pledge, made first by Mayor Steve Benjamin.
“If he doesn’t keep his word, that’s a whole new set of circumstances,” Williams said. “If he doesn’t, there’s going to be a price to pay.”
In March, the two groups joined with the Columbia Hotel and Motel Association to call not only for the pledge, but for a provision that annual funding for each cultural organization be linked to the rate of inflation. That request is not reflected in the budget memo council is reviewing.
Even by drawing $1 million from the account for unallocated meal-tax revenue to balance next year’s spending, the city still would have about $476,000 left in that account during 2014-15, budget director Missy Caughman said Monday.
Repaying that new loan – which has not been finalized – will add about $1.3 million yearly in debt payments to the current $1.3 million the city owes on an existing meal-tax loan, city financial officers have said.
Council already transfers $3 million from meal-tax income to its general fund, which pays for a range of municipal services. The extra $2.6 million for annual debt payments raises the total to $5.6 million, which would consume slightly more than half the projected $10 million in meal-tax revenue projected to flow into Columbia’s coffers between July 1 and June 30, 2015, the end of the upcoming fiscal year.
City officials have been raising their projections on meal-tax revenue as more people eat in restaurants and drink in bars and hotels.
In fiscal 2012-13, the city received $9.4 million, according to Caughman’s figures. This year, the income is projected to be nearly $9.8 million – a $745,000 jump from projections earlier in the current fiscal year. Next year, the city estimates meal taxes will generate $10,081,994.
Reach LeBlanc at (803) 771-8664.