Clausen: Misspelled 'Coumo' tax hits food tabs
- Food bills at the Back Nine Grill in Pittsford come with a new in-house tax.
- Restaurants turn to sales receipts to voice opposition on mandated wage increases.
Don't be surprised the next time you pay a food bill if there is an extra line-item on the sales receipt.
Squished between the state-mandated tax and the total might be something like, "NYS Labor Surcharge" or maybe a misspelled "NYS Coumo Tax." These small surcharges have been added to the bill by area restaurants and resorts letting customers know about the impact of a $2.50 an hour increase to tipped workers that went into effect earlier this year.
Belhurst Castle in Ontario County added a nearly 4.75 percent surcharge to sale receipts. The Back Nine Grill on East Avenue in Pittsford has added a 3 percent charge on its receipts as a way to poke fun at Gov. Andrew Cuomo.
"I guess what I do is blame Cuomo for signing the bill, so that is why I used his name," said Beau Aquilina, owner of Back Nine, who bought the restaurant roughly two years ago. "We spelled his name wrong purposefully. We know that."
Restaurant owners all over the state have felt under siege by Cuomo's efforts to raise wages for workers in a noble effort to combat poverty. After getting the minimum wage for fast food workers at large chains operating in upstate bumped to $15 an hour by July 2021, the governor has set his sights on raising the wage to $15 an hour for all workers.
Belhurst Castle: Mystery surcharge not political
It has left many independent restaurants — particularly the local breakfast spots, the Greek diners and the late-night places serving sloppy trash plates — worried about survival in an already volatile industry.
It has also created a lot of hostility directed at smaller restaurant owners, said Mike Clarq, co-owner of the Burgundy Basin Inn and president of the local chapter of the New York State Restaurant Association. "It's a threatening environment if you own a restaurant and you are in the hospitality business," he said recently during a panel on the minimum wage issue at the Bausch + Lomb Public Library building.
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Many restaurants already have increased the prices on their menus and most customers don't even realize it, much less complain about it. The smart operators raised their prices last year, well before the busy summer season. Others waited to reveal new prices this winter, during the slow season.
In some cases, food prices have gone up 50 cents, $1 or $2 for such things as a burger, a steak and other entrées.
"Everybody has raised all their drinks and food prices," Aquilina said. "Instead of following the trend, we started thinking about what could we do so we came up with this thing and we named it 'NYS Coumo tax', and it is obviously — again — spelled wrong."
The idea of using a sales receipt or menu to voice displeasure over increased mandates by restaurants isn't new, even if its use is fairly rare in New York state.
Two years ago, a chain of Gator's Dockside restaurants in Florida began charging a 1 percent Affordable Care Act surcharge on their bills. Several restaurants in California also did something similar, according to the Los Angeles Times.
The American Diner in Onondaga County has a breakfast special called the "Dictator Obama/NYS Special (King Cuomo)." It’s a $3.59 meal with two eggs and toast with a tax of $27.99. A Manhattan restaurant dropped its own 2 percent surcharge after customers began questioning the cost.
Belhurst Castle and the Back Nine added their surcharges in January.
Kevin Reeder, owner of Belhurst, said his tipped wage staff worked a total of 48,000 hours last year. “Taking on the mandate — the increase — without (adding) anything at all is just a life sentence," he said last month. Reeder also said the resort may end the surcharge, which is explained on menus, depending on feedback.
Aquilina said the charge helps offset just one week's worth of wages connected to the costs of raising the tipped wage from $5 to $7.50 an hour. "I think last month we got $300 to $400," he said, adding that the charge might eventually be absorbed into menu prices, based on customer feedback.
"The majority of them are OK with it,” Aquilina said. "I do know firsthand that three of them refused to pay it, and I said, 'Fine. That's no problem. I’ll take it off your bill.' But I said, 'Folks, I want to let you know if this is the response of all the customers then, unfortunately, I will take this off and I'll rewrite the menus on April 1, and I will put an added $1 across all menu items and all drinks.'
"It is going to cost each person that walks into the door $3 or $4 more instead of loose change out of their pocket."
It's easy to see how some customers might balk at the surcharges since they look like they might be coming from the state. To be clear, these surcharges aren’t from the state. The restaurants are doing this, and they are talking about it.
Then again, maybe restaurants should just swallow the increases and quietly pass them off to customers?
"It is sink or swim for me," Aquilina said. "You don’t want to price everything where you price yourself out of the market (but) we thought we were trying to be as fair as we could. If we find out if the public is not happy with that tax, we will have to do something else."
Todd Clausen is the work life reporter for the Democrat and Chronicle. Email him at TCLAUSEN@gannett.com, or call (585) 258-9883.