The Harvester and The Meals Tax Mislead
In a March 2020 letter, former Assistant Town Manager Hatt Hankins wrote, “If the Town programmed a parks & recreation department, you would rationally count that as a quality of life effort and not expect that it create a ‘profit’. The Harvester is similar in that is an investment Town Council makes to both quality of life and economic development.”
Using The Harvester Performance Center’s own numbers, we have learned that a mere 2% of their ticketholders are Rocky Mount residents. Despite the paltry number, the Rocky Mount Town Council, between 2013 and 2019, spent a whopping $6,228,376.32 in taxpayer funds on the facility. in 2019 alone, the Town allocated $484,161.00 to underwrite The Harvester—during that same period, the Town proposed spending $60,080 on the entirety of Rocky Mount’s parks, 12% of what they spent on a single performance venue.
In this same letter, Hankins insisted, “Since our second year, operations managed by Harvester Performance Center LLC must stand on their own without subsidy from the Town.” This was not a misstatement, it was a lie.
Now that we have debunked the quality of life argument, and the Harvester being self-supporting, the politicians will say, “But the meals tax!” Both Town Manager James Ervin and Assistant Town Manager Matt Hankins made wild (untrue) claims regarding the increase in revenue due to the meals tax and The Harvester.
In 2013, before the Harvester opened, The Town of Rocky Mount collected $1,226,515.00 in meals tax revenue. In 2019, the Town collected $1,601,588.00 in meals tax revenue. At face value, that is an increase of $375,073.00.
If you are looking for a true picture of what is happening, any economist will tell you that you must consider multiple factors.
With a rising cost of living, 9.75% since 2013 (American Institute for Economic Research), $1,226,515.00 then would be equivalent to $1,346,100.21 today.
We also cannot ignore that more Americans than ever are eating out. The Bureau of Economic Analysis shows that Virginians have increased their habits of eating out substantially. If the Town collected $1,266,515.00 in 2013, according to BEA figures, that number without inflation would be $1,597,053.00 in 2019.
When you look at inflation combined with the growing number of diners, the $1,266,515.00 collected in 2013 would have naturally grown to $1,697,408.00 in 2019. The Town of Rocky Mount shows it collected $1,601,588.00 in 2019. That is $95,820.00 (-5.7%) short of what should have been natural growth.
There is no discernable growth in meals tax revenue that may be attributed to The Harvester Performance Center. Unlike the Town of Rocky Mount, the numbers do not lie.