Restaurant owners fighting tax hike

PROVIDENCE, R.I. (WPRI) - Dozens of restaurant owners packed the basement of the Rhode Island State House Wednesday to voice their opposition to a proposed two percent meal and beverage tax increase.

A hearing was held before the House Committee on Finance.

Restaurant owners say the tax is unfair and they're asking lawmakers to reject it.

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"We have one of the highest unemployment rates. We have some of the highest taxes around," said Bill Kitsilis, owner of Angelo's Palace Pizza.

Gregg's Restaurants owner Bob Bacon says he is worried customers will take their dining dollars across state lines.

"This could be the death call of some businesses," said Bacon. "Two of my locations are right on the state line with Massachusetts and if this were to pass, I'd be in a four percent deficit right out of the gate."

"Already other cities have started notifying conventions that we have a 300 percent tax increase coming. Those conventions aren't going to come here," said Bob Burke, owner of Pot Au Feu.

The restaurant owners aren't along. Many lawmakers say they're opposed to Gov. Lincoln Chafee's plan to increase the state's restaurant tax from eight to 10 percent.

The governor says some $40 million will be raised from the tax to fund local public schools.

"It's just disastrous for us. We're trying to keep more people employed. We're trying to fight increased commodity cost and food cost and keep customers coming into the restaurant," said Kitsilis.

Lawmakers could vote on the proposal as soon as May.