Gulfport isn’t the only city hoping to cash in on a restaurant tax — Bay St. Louis also asked the Legislature for a voter referendum, and it was approved Wednesday.
Mayor Mike Favre said the state Department of Revenue estimates that Bay St. Louis could collect $544,000 or more from a 2 percent added tax on food and beverages at the city’s restaurants and bars.
On Wednesday, the state Senate approved the referendum, introduced by Rep. David Baria, D-Bay St. Louis. It next goes to the governor’s desk, and once he signs it, the city will set a date for a vote.
Sixty percent of voters must agree to the new tax for it to become law. Favre said the city will present workshops to get the facts out to the business owners, the sports leagues and the voters.
“We want input from everybody,” he said. “We want to make sure everyone is informed.”
Spending the money
The tax proceeds would be used strickly to maintain and upgrade parks and to enhance tourism, Favre said. The bill requires the fund be audited each year, and the tax automatically repeals after July 1, 2023, unless the city seeks an extension.
Favre said he’d like to see a special election this summer before the new budget year begins Oct. 1.
“Tourism is the only industry in Bay St. Louis,” said Tish Williams, executive director of Hancock Chamber of Commerce. Tourism fuels all the small businesses in the city, she said, and if residents vote for the tax, the money can be used to market the city to tourists, to add new festivals and to build sports facilities that will bring more people to town.
“Right now the city has no funds to do any of that,” she said.
For and against
Favre and Williams said some merchants are against the tax that would tack on 2 cents for each dollar spent at a restaurant or bar. Others are for it, Williams said, as long as the tax revenue will be used to create business.
At least 50 percent of the tax would be paid by people from out of town who visit the Bay’s restaurants and bars, Favre said. The Bay has seen several new restaurants open and is getting a hotel in the downtown. “Now we just need a way to keep them full,” he said, especially in the off season from November through February.
Among the events that could be expanded or launched with the extra revenue are growing Cruisin’ The Coast events in the city from 3 days to 4, he said, extending the town’s Christmas celebration over several weekends and introducing a Taste of the Bay Cookoff early in the year.
Other cities benefit
People don’t have to look farther than Ocean Springs to see the tax work, he said. In fiscal year 2018, Ocean Springs collected $1.3 million, which was $50,000 higher than the previous year.
It may take more than one election to get enough votes for the new tax. In August 2016, Pascagoula voters turned down the proposal for a restaurant tax on the first vote, with 757 in favor of the tax and 589 against, resulting in 56 percent approval rather than the required 60 percent.
With such at close vote, the city held another vote in November 2016 and this time it passed with 61 percent of the voters in favor of the tax. Last fiscal year, the special tax brought $989,000 in revenue for Pascagoula.