Progressives on the Burlington City Council want to expand and continue an enhanced local tax on meals, alcohol and entertainment services, while some Democrats are concerned about the way it’s impacting the business community.
Proposed changes to what’s known as the gross receipts tax — an increasingly important revenue stream for Burlington — would include third-party food delivery services and renew an increase, from 2 percent to 2.5 percent, that was set to expire at the end of June.
Councilor Gene Bergman (P-Ward 2) introduced the ordinance change at a council meeting on Monday. He seemed disheartened, after two years of debate about ongoing financial challenges facing the city, that the discussion had to take place at all.
“This is, to my mind, an essential revenue source that if we do not continue, it is going to punch a huge hole in the budget, and I find it to be irresponsible to do that,” Bergman said.
The half-percent increase on the tax for meals, alcohol and entertainment was first approved in 2024 and renewed last year. According to the city, the increase has raised nearly $1 million annually — a revenue boon at a time when Burlington has faced multimillion dollar budget holes.
But some Democrats are against it. Councilor Buddy Singh (D-South District) said restaurateurs he knew were too afraid of reprisal to speak out publicly about their concerns. But he insinuated, based on their feedback, that the tax was a hindrance on the Burlington business community, and that it may be driving customers to restaurants and businesses in other cities.
“We talk about affordability all the time here, but we keep trying to raise revenue sources, and we’re doing it on the backs of what’s happening in the downtown district,” Singh said.
Councilors offered competing characterizations of the tax — Bergman said it was “stable,” while Singh warned it “keeps going down” — so Katherine Schad, the city’s chief administrative officer, was called upon to set the record straight. She noted that the city expected to bring in $6.8 million from the gross receipts tax this fiscal year and is now projected to slightly exceed those estimates.
“Aside from the pandemic years, we have found gross receipts to be a relatively stable source of income,” Schad said. “And I have all of the receipts on that, so to speak.”
Councilor Mark Barlow (D-North District) said data trends from planBTV, a broader ongoing effort to create a new municipal plan, showed business activity in Burlington was down and worried that “continuing some of the taxation and fee regimen that we have is not necessarily the way” to encourage a more vital area.
To further questioning from Dems about trends in the gross receipts data, Schad replied that “the perception about the drop in business seems greater than what the numbers bear out.”
Urging her fellow council members to put more energy into promoting the downtown area and its residents, not just its businesses, Councilor Melo Grant (P-Central District) pointed to her own recent efforts to make a video series where she interviewed downtown visitors and other efforts to “spread joy.”
“We have to figure out how we’re going to promote our city, because we can’t expect Canadians to come back in the numbers that they have been visiting anytime soon,” she said.
Ultimately, a majority of the council agreed to send the ordinance change to the Board of Finance, where it will be considered and then brought back to the full council in June. The measure passed 10-2, with Singh and Council President Ben Traverse (D-Ward 5) voting against it.
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