Jacksonville City Council nixes option for food, beverage tax in fight against homelessness

The possibility of a specialized tax brought an usual mix of groups to City Hall Monday – restaurateurs, homelessness resource organizations, domestic violence advocates and neighborhood association leaders.

A City Council committee was set to vote on giving Jacksonville the possibility of a 1% food and beverage tax to build a homelessness trust fund – following Miami-Dade County's model – but one of the bill’s sponsors ultimately withdrew the option after it became clear it would not pass in a committee vote. The full council will vote on the withdrawal Sept. 26.

The bill would not have levied the new task but instead served as a petition to the state government for its consideration. If passed in Tallahassee next year, the legislation would have returned to Duval County for City Council members to debate.

Criticism against the bill stemmed from the continued stress on the restaurant industry in a post-pandemic economy.

Arguments for the bill focused on the continued affordable housing crisis in the city, and the lack of dedicated funding source to help solve it.

“To me, this is just another example of people getting scared when a few folks show up with a loud megaphone,” Jimmy Peluso, the District 7 council member, told the Times-Union after the vote. “You know, we need political courage in the city, and today ... we didn't see my colleagues step up when the opportunity presented itself.”

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Peluso and Michael Boylan introduced the bill after working together on the city’s special committee to address homelessness, affordable housing and access to health care – which met for the first time just over one year ago. The committee’s final report suggested the tax as a way to provide dedicated, recurring resources for a homelessness trust fund.

Multiple committees in the city have since met to discuss solutions on the same topics, with some legislative success. However, the tax option would have offered the most sustainable, wide-ranging option discussed thus far.

What were the arguments for and against the food and beverage tax?

While City Council can directly pass most legislation, it needed permission from the state government to levy a new tax. The bill withdrawn Monday would have served as that “ask,” not as a definite tax to be implemented.

If then passed in Tallahassee, City Council could have debated two new options: an optional 1% tax on food and beverages sold at restaurants with a liquor license and an optional 2% tax on food and beverages sold in hotels and motels.

The tax would have increased costs for customers when dining out at those restaurants, such as adding an extra $1 on a $100 bill.

The funds would have then been split into a generalized homelessness trust fund and a fund specifically for those displaced due to domestic violence. It wasn't immediately clear how much revenue the tax would have generated.

Miami-Dade is the only county in Florida currently authorized to levy the tax after petitioning the state in 1993. Miami Beach considered the tax, to similar opposition as in Jacksonville, in 2021.

The chief executive officers for Sulzbacher Center, Changing Homelessness, Hubbard House and other Jacksonville nonprofits all came to support the bill, calling it the first step in a long process that could ultimately help the city’s most vulnerable residents.

“We have worked hard with every dollar we have, and now we’re asking for help from the city,” Dawn Gilman, CEO Of Changing Homelessness, told the committee before the vote. “City Council does not have a single line item that goes toward a system of care or a plan specific on reducing homelessness.”

Separately, restaurant owners and organizations came out against the bill, saying it unfairly targeted the restaurant industry still recovering from COVID-19 shutdowns, inflation increases and skyrocketing credit card fees.

Restaurant owners would have to pay to update their back-of-house systems, as well as determine how to actually pay the tax due to the vague nature of the legislation itself, Nicole Chapman said. Chapman works for the local branch of the Florida Restaurant and Lodging Association, representing 350 local businesses.

The organization opposed the bill, but not the fight against homelessness, Chapman said. She called hospitality the “industry of opportunity” because of the opportunity for workers to rise through the ranks to leadership, but it did not need to be taxed more than others.

“It's a societal, city problem, and maybe we could come up with a solution that everyone can contribute towards,” Chapman told the Times-Union before the vote.

What other options does the city have?

Boylan, a sponsor of the bill, said he would only vote to withdraw it “with great reluctance” if it meant every other member who voted against it would support finding other ways to accomplish the same goals.

Council members Joe Carlucci and Terrance Freeman separately said they had plans to introduce legislation in the coming weeks, but neither expanded on where they would get the money or how it would be used.

Boylan directly asked Freeman to explain his idea.

“And I thank you for asking, and the answer is no,” Freeman said. “Show up on Tuesday night at the budget, and we will have a healthy debate on that.”

The full council will vote on Mayor Donna Deegan’s first budget Sept. 26 in what is expected to be a marathon meeting – starting at 3 p.m. instead of the usual 5 p.m.

Freeman’s implication of introducing the fund as part of the budget concerned Peluso, the other sponsor of the bill, who worried it would get wrapped up in the budget process and potentially impact the mayor’s vision of the $25 million currently set aside to implement ideas from her transition committees.

“It's a great opportunity to try to slip something in there that doesn't get the full vetting that maybe it should, certainly not the committee process,” Peluso said.

City to consider diversion program

City Council President Ron Salem briefly participated in the meeting prior to a vote to discuss the continuation of a diversion process he started earlier this month.

Salem did not share his stance on the bill with the committee, but he shared his plan to file a bill Tuesday that would start a trust fund specifically to aid people on the verge of experiencing homelessness.

He started the program with a one time donation of almost $14,000 to Changing Homelessness Sept. 1, leftover from the funds he raised for his installation as City Council president. The legislation introduced Tuesday will propose an additional $500,000 from City Council funds and $500,000 from the mayor into a trust.

The interest from that trust will go to Changing Homelessness to allocate one-time $1,500 payments to people with prohibitive costs that could not be covered by rental assistance programs.

“I want to focus on that poor family that's gonna get broken up because mom's car broke down, and she can't get to work,” Salem said. “That's tragic.”

This article originally appeared on Florida Times-Union: Jacksonville City Council rejects food, beverage tax for homelessness