Business owners react to Grants Pass proposed food and beverage tax

GRANTS PASS, Ore.– The Grants Pass City Council is moving forward toward implementing a food and beverage tax and a utility fee to fund public safety.

Grants Pass city officials have been trying to find funding for police and fire for years.

Now, they want a 3% food and beverage tax to address a large part of the city’s deficit.

Grants Pass resident Mike Pelfrey said, “I don’t care if it’s a sales tax, or a food and beverage tax. In my opinion, it’s like committing financial suicide for this city.”

Even after passing a public safety levy last year, Grants Pass still needs over $3 million to keep police and fire fully staffed.

There have been a number of taxes and fees on the ballot over the last five years, but they were all voted down.

Now, the city council is looking to add a $9 utility fee each month and a 3% food and beverage tax, without a public vote.

Terry Hopkins is a restaurant owner in Grants Pass and is also a membership representative in the Oregon Restaurant and Lodging Association.

Hopkins said, “I’m in an industry that’s very competitive, very low-margin and is still struggling to recover from the impacts of being closed down after COVID.”

He believes in supporting police and fire in the city, but doesn’t think a food and beverage tax is the right solution.

“Owning a local business here that is a few years old and looking forward to expand,” Hopkins said, “if given the opportunity, I’m absolutely going to take a chance and move outside of the area where I can have a competitive advantage of 3 to 5% over others that are in this area.”

City Councilor Rob Pell is also the owner of Sunshine Natural Foods, which would be affected by a food and beverage tax.

He prefers a food and beverage tax instead of a sales tax because it would affect the Grants Pass economy less.

Pell said, “from a perspective of tourism, and from a perspective of being the only city in the state with a sales tax, it could be devastating.”

Pell believes the food and beverage tax would also allow the city to capitalize on some of the tourism dollars in the area.

He said the sales tax could be more effective financially, but a majority of the city council preferred the food and beverage tax.

Pell said, “we hear from tourists virtually every day that one of the reasons they like coming to Grants Pass is there’s no general sales tax. We hear that every day.”

The utility fee and food and beverage tax won’t be going into effect just yet.

Mayor Sara Bristol said the council will make a final decision by July at the latest.

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Former NBC5 News reporter Derek Strom is from Renton, Washington. He recently graduated from the Edward R. Murrow College of Communications at Washington State University with a degree in Broadcast News and a minor in Sports Management. He played in the drumline with the WSU marching band. These days, he plays the guitar and piano. Derek is a devoted fan of the Mariners, Seahawks, and Kraken.
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