- Richmond Common Council approved a 1% food-and-beverage tax (8-1) to fund parks, trails, and Whitewater Gorge projects.
- The tax applies to prepared food and drinks (including restaurants, bars, catering, and deli hot/prepared items), takes effect March 1, 2026, and distributions begin in May via the state.
- Annual revenue estimates range from about $900,000 to $1.5 million, and the tax is authorized to run until January 1, 2047.
- With roughly $7 million in priority projects identified, the city must choose between bonding to accelerate work or paying for projects over time as revenue arrives.
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The adoption of Richmond’s 1% Food and Beverage Tax (FAB) presents a pivotal moment for the city’s park infrastructure funding strategy. Legislation passed by the Indiana General Assembly, codified under Indiana Code 6-9-64, empowers the city to levy this tax, restricted to revenue from prepared food and drinks sold at restaurants, bars, catered events, and grocery delis for prepared/hot food—not for sale of non-prepared grocery items. The tax was formally approved by the Richmond Common Council on December 15, 2025, by an 8-1 margin. The effective date is set for March 1, 2026, with the Indiana Department of Revenue to begin transferring funds to Richmond in May 2026.
From a financial perspective, projections for first full-year revenues vary: the state’s Legislative Services Agency estimates approximately $900,000; city council members believe the figure could reach $1.3 million; Richmond’s public materials project up to $1.5 million in revenue. These discrepancies influence budgeting assumptions, bond-capacity planning, and the size/scaling of projects. The sunset provision under current statutory law sets the tax expiration for January 1, 2047.
Strategically, the city must choose between bonding multiple improvements simultaneously or undertaking projects one by one. Bond financing could accelerate project delivery, creating visible improvements early and potentially maintaining public support, but requires longer-term debt service obligations. Alternatively, pay-as-you-go financing limits indebtedness but slows progress.
The proposed priority list is approximately $7 million in projects, suggesting that in the first few years, tax revenue will cover only part of park needs. Questions about maintenance vs. expansion, oversight, transparency, and equitable distribution—especially between neighborhoods and between residents vs. visitors—could become focal points. Clear accountability mechanisms and clear project prioritization will be central to sustaining public trust. Furthermore, because some tax burden is shared by visitors dining in the city, estimates about visitor contributions (which affect net resident burden) will matter.
Finally, there are open risks. Economic downturns or disruption to the food and beverage industry (e.g., supply cost inflation, labor shortages, health crises) could reduce collections. The effective start date and administrative processes with state DOR must be smooth. Any delays in requiring public hearings, ordinance adoption, or coordination of revenue remittance could postpone funding to parks. Politically, the one dissenting vote, concerns raised in public hearings about tax burden, maintenance vs. expansion, and the length of the tax until 2047 may signal friction should expectations not be met.
In sum, the tax offers a reliable, though modest, dedicated revenue stream with the potential to transform Richmond’s park and recreation infrastructure. Execution choices—project phasing, financing approach, governance—will determine whether the initiative achieves its intended impact and preserves public confidence over its 20-plus year lifespan.
Supporting Notes
- Richmond Common Council voted 8-1 on December 15, 2025, to enact a 1% food and beverage tax to support parks, trails, and Whitewater Gorge improvements.
- The tax applies to food and beverage sales at restaurants, bars, cafes; catered events; and hot or prepared items sold at grocery store delis; non-prepared grocery items are excluded.
- Revenue estimates range between $1 million and $1.5 million annually; state estimate for 2026 of ~$900,000; city council believes first year could yield $1.3 million or more.
- The tax becomes effective March 1, 2026; city will begin receiving revenues in May 2026 from the Indiana Department of Revenue.
- Statute (IC 6-9-64) establishes expiration of the tax at January 1, 2047.
- About $7 million in priority park and trail improvement projects have been proposed.
- Council must decide whether to use bond debt to fund multiple projects simultaneously vs. sequential funding with collected revenues.
- Public hearings revealed concerns: whether the tax funds will maintain existing parks or expand the system, whether there are too many parks, tax level, oversight, and that the sunset date continues until 2047.