Revenue is up for the Advertising & Promotion Commission, but not because the city has seen more tourism.
Inflation, which is up higher than it’s been in years, is hitting the restaurant business, and higher tabs for customers means higher tax revenue for the A&P Commission, according to Executive Director Sheri Storie.
“I attribute a lot of it to an increase in food costs,” Storie said. “Restaurants have been hit with huge increases in food costs and they have passed that on to customers.” Restaurant Business Online, a trade magazine for the restaurant business, reported recently that eateries, both fast food and sit-down restaurants, had raised menu prices 7% in the past year with Starbucks and McDonald’s going up 8%.
The story said menu price inflation had hit a 40-year high, blaming the increase on higher prices for food and also for employees, whose salaries have gone up about 10%.
“It costs a lot more to take a family out to eat now than it did a year ago,” Storie said. “It’s sad for the consumer, but it’s happening.” The A&P Commission, which promotes tourism, is funded primarily by two sales taxes. One is a 2% sales tax on prepared food, and the other is a 3% tax on lodging. For the year, the revenue from the prepared food tax is up $26,000, said Storie, who has stated in the past that Pine Bluff’s tourism is limited by the small number of attractions in town.
“That’s a good chunk of revenue above what we normally get,” she said.
The Federal Reserve has started raising interest rates in an attempt to rein in inflation, which came in at 8.5% for March, a rate that hasn’t been seen since 1981. But Storie said she didn’t think the increase in proceeds from the prepared food tax would cool off anytime soon.
“This started happening months ago,” she said.
Expenses are also down for the moment, Storie said, but the status of that number has more to do with when projects start. Money sitting in that account, she said, is earmarked for certain projects. So while there may be more money in the account today than the budget predicted would be there, those funds will eventually be spent when those projects get underway.
“It’s more of a timing thing,” she said.