Miami-Dade County

Miami Beach restaurants might lose exemption from county homeless tax

A scene from Prime 112 (and owner Myles Chefetz in black). The restaurant would see a higher food tax if the leader of Miami-Dade’s homeless board succeeds in expanding the county’s homeless tax to Miami Beach and two other coastal cities.
A scene from Prime 112 (and owner Myles Chefetz in black). The restaurant would see a higher food tax if the leader of Miami-Dade’s homeless board succeeds in expanding the county’s homeless tax to Miami Beach and two other coastal cities. The Miami Herald

Miami Beach restaurants would lose their exemption from Miami-Dade’s homeless tax under a new effort to boost funding for shelters and other services.

When the Florida legislature created the 1 percent sales tax for Miami-Dade in 1993, state law exempted Miami Beach, Surfside and Bal Harbour because the coastal cities already had their own restaurant taxes that fund municipal services. With Washington holding back about $6 million in aid, the leader of Miami-Dade’s homeless board wants to generate more local dollars by expanding the restaurant tax to the beaches.

“We’re frozen where we are if we do not find a way to expand our recurring base of revenue,” Ron Book, head of the county’s Homeless Trust board, said at a meeting Friday with service providers. “We are not going to be able to continue to meet the challenges, and you all are going to have to look to contract and not expand.”

The potential for a broader tax would mean a significant revenue boost for the county’s homeless programs, which currently relies on about $22 million from the restaurant surcharge. Book estimates expanding the tax to Miami Beach would generate as much as $6 million a year, with up to $1 million available from Bal Harbour and Surfside.

Only 85 cents of the county’s restaurant tax goes to homeless programs. The remaining 15 cents funds domestic-violence programs. The 1 percent tax gets charged to restaurants that have liquor licenses but aren’t attached to hotels. Hotel restaurants pay a separate 2 percent tax that funds the county’s tourism bureau.

Book’s push for more tax dollars comes at a time when his 12-year tenure as head of the homeless board is getting more scrutiny than ever. Book’s critics are using the funding crisis to question whether county commissioners should once again waive term limits and allow Book, one of Florida’s top lobbyists, to continue in the volunteer chairman post when his current term expires later this year.

On Friday, the Homeless Trust’s executive board voted unanimously to approve a contingency plan from executive director Victoria Mallette to spend about $4.6 million in restaurant-tax reserves if Miami-Dade can’t find other funds to plug the revenue hole left by denied federal grants. Mallette said the remaining gap was covered by provider cuts or reductions in their funding requests.

An expanded restaurant tax wouldn’t provide immediate relief, since Book said he would target the 2017 legislative session for the change. He’s expecting resistance — be it from the restaurant industry, or other forces in Tallahassee that tend to block any sort of expansion of local tax authority.

Book’s lobbyist business has brought controversy — one of his clients recently secured nearly $730,000 in a federal grant through the Homeless Trust, though Book publicly recused himself from the vote. But the pursuit of a broader tax law would give Book a chance to highlight the upside to his position as one of Florida’s top political fixers.

His plan would involve imposing a higher tax burden on coastal restaurants, which already pay a 2 percent city tax that wouldn’t go away under Book’s plan. Miami Beach already has its own homeless agency, with a budget of about $1.3 million.

Philip Levine, Miami Beach’s mayor, sounded encouraging during an interview Friday, saying the city has a homeless population that appears to be growing and in need of more help.

“I have to say, we have a homeless challenge in Miami Beach. I’m getting more and more complaints from residents and tourists,” he said. “We can’t just close our eyes to this issue.”

Ricky Arriola, a Levine ally on the City Commission, struck a similar tone. “It’s something I want to explore and understand,” Arriola said of Book’s plan.

Restaurant’s tack taxes onto their bills, meaning customers would end up paying more on the coast if Book succeeds. News of a potential extra 1 percent tax quickly had Myles Chefetz, a Miami Beach restaurateur, doing the math Friday afternoon.

“Would they take away one of our two?” Chefetz said, referring to Miami Beach’s 2 percent restaurant tax.

Told those taxes would remain, Chefetz, owner of the luxe Prime 112 steakhouse and more mid-market Big Pink diner, said he doubted a higher tax would cause diners to avoid the beach in favor of the mainland.

“I don’t think it’s that big of a deal,” he said. “I probably shouldn’t say that. But it’s a good cause.”