Restaurant owners rally against proposed tax increase

Diners around the state should start to see calls to action cropping up on their restaurant tables, as business owners picked up “10% is 2 much” signs at the Monday afternoon restaurant rally at Angelo’s Pizza Palace on Mendon Road.

The event was sponsored by the Rhode Island Hospitality Association, who produced the table-toppers that listed contact information for state Rep. Gordon Fox and state Sen. M. Teresa Paiva Weed, and read: “STOP the meals tax increase. RI can’t afford another tax hike. Tell your legislator to oppose the Meals and Beverage tax increase.”

Meals are already subject to a 7 percent sales tax, and a 1 percent restaurant tax, for a total of 8 percent. If the increase is approved, diners will face a 3 percent restaurant tax, for a total tax of 10 percent of the cost for the meal.

Restaurant owners passionate about opposing the proposed tax increase will look to their customers for further support, to sign petitions and contact local legislators.

“It’s a sit-in today,” joked Angelo’s Palace Pizza owner Bill Kitsilis as he noted several restaurant owners sitting on the floor of his back dining room on Monday, where more than 100 people filled tables and stood around the walls, even on booths outside the room so they could peek through the windows.

It was certainly a protest as the RIHA hosted a rally at the restaurant on Mendon Road to talk about organizing a revolt against Gov. Lincoln Chafee’s proposed increase in the meal and beverage tax as part of his $7.9 billion budget.

At the event sponsored by Bill Kitsilis, Gregg Davenport of Davenport’s Restaurant, and David Lahousse of The Lodge and Kay’s, restaurant owners and political officials shared their grievances with the tax, and offered suggestions for taking the next steps to fighting it, from contacting representatives and senators, to having customers sign petitions.

State representatives Rene Menard, James McLaughlin, State senators Joshua Miller and Roger Picard, and Cumberland Town Councilor Charles Wilk were among the officials present.

“To get 80 to 90 restaurant owners to show up here on a Monday when they’re working 80-hour weeks shows we’re not taking this lightly,” Bill Kitsilis told The Breeze.

Dale Venturini, president and chief executive officer of RIHA, said the showing of supporters was “very encouraging.”

“A couple of people closed to come today,” she said. “That tells the story all itself.”

Business owners came together, seemingly agreeing to overlook competition amongst themselves in favor of strengthening the fight against the Statehouse.

“Your competition is not on your right and your left now,” Venturini said. “It’s a bigger entity.”

Venturini, who said the movement would be run “like a campaign,” said a revolt at Waterplace Park in Providence is in the works.

“If we stay together, we will beat this,” Cumberland House of Pizza owner Charles Lambrou said, adding that he will put the “10% is 2 much” table-toppers in his restaurant.

Lambrou said the tax “doesn’t make sense,” especially when the money is not going to the town like the existing 1 percent tax, and rather into a general fund.

“They originally told us (the 1 percent tax) was only temporary, but it was never repealed and now it’s increasing. Who do you trust?” he said.

Venturini told the crowd that the existing 1 percent tax was supposed to help with property taxes.

“Have your property taxes gone down?” she asked, receiving laughter in response.

Christine Kitsilis of Angelo’s Palace Pizza said that “enough is enough.”

“We are insulted,” she said. “It’s not just pennies.”

“I just think it’s kind of ridiculous,” Overtime Bar and Grille co-owner John Oriani said. “It’s really going to affect business and customers.”

At the end of the meeting, Oriani raised his voice to offer encouraging words that garnered applause.

“We may be a small state,” he said, “but we have some of the best restaurants in the country.”

But those in attendance agreed that Rhode Island’s location can end up hurting the local economy while boosting that of other states.

“Doing business in Rhode Island sometimes is like death by a thousand cuts,” Bill Kitsilis said.

Massachusetts, Venturini said, has a 6.25 percent tax, with a 0.75 local option that only about 100 municipalities apply. They know they can capitalize on residents in neighboring states to drive a few extra minutes for lower prices.

“What’s wrong with this guy?” Woonsocket’s Savini’s Restaurant and Ciro’s Tavern owner Roger Savini said of Chafee. “Why doesn’t he lower the tax and get competitive with the other states?”

Savini said that he is already receiving phone calls about booking for spring and summer weddings and events, where the tax would be placed on bills that reach into the thousands of dollars.

“At the end of the day, we should be a tax haven,” Bill Kitsilis said. “Instead, we’re forcing Rhode Islanders to spend their money elsewhere.”

Lyn Jennings, who organized Rhode Island Salons United Against Taxing Services to fight against last year’s 7 percent proposed tax on services that included haircuts, said that customers will support local businesses.

“Don’t think that your patrons won’t want to sign, because they will,” Jennings said, adding that she obtained more than 800,000 signatures for her cause.

“I’m here today to support you because I was there last year. I know what it takes,” Jennings said. “Gov. Chafee is on the attack... It’s very important that small business stick together and fight because this is a war on small businesses.”

All three state representatives present said they would vote against the tax. McLaughlin, on behalf of State Rep. Karen MacBeth who could not attend for personal reasons, said MacBeth would also not vote for the increase.

“You don’t raise taxes on economic drivers in a bad economy,” McLaughlin said.

Menard said that the legislature needs to make cuts itself.

“We have got to start with ourselves before we ask people from the public to reach into their pockets,” Menard said to applause. “You need 51 people to pass a budget, and you already have three no’s.”