TOPIC: A Tax that would only hit a theater?
A Tax that would only hit a theater? 21 Jun 2012 16:49 #38646
How would councilman Hurley vote?
La Grange Theatre Owners Say Proposed Ticket Tax Would Hurt Business
David Rizner, co-owner of the La Grange Theatre, says a proposed tax on tickets would hurt their business' ability to remain relevant in the market.
By Matthew Hendrickson June 19, 2012
A proposed amusement tax on tickets sold at the La Grange Theatre would hurt their bussiness and others in downtown La Grange, owners said Monday.
David Rizner, co-owner of the La Grange Theatre, said the theatre was, "definitely against," the village adding a tax on tickets. Increasing ticket prices in a way that would not add revenue to the theatre would hurt the business' ability to remain relevant in the market, Rizner said.
The idea of adding an amusement tax on tickets sold in La Grange has been brought up several times in recent Village Board budget discussions by Trustee Michael Horvath as a way to raise revenue for the village. Horvath has said previously that he supports the idea of an amusement tax because it would not single out La Grange residents, but be applied to anyone that uses the theatre, many of whom do not live in La Grange.
At a Village Board meeting on June 11, discussion of a possible tax got mixed reactions from La Grange trustees. Trustees Horvath, Jim Palermo and Bill Holder said they were interested in getting more information from staff about a possible tax. Trustees Jeff Nowak, Mark Kuchler and Mark Langan said they did not support a possible amusement tax, or did not want village staff spending time looking into the matter. In the end, Village President Liz Asperger instructed staff to look into the matter, but to not make it a priority.
Rizner said he would be more supportive of a sales tax increase, which could be shared with other businesses in downtown La Grange. At the moment, the only business that would be hurt by the amusement tax was the La Grange Theatre, he said.
"It's basically a 10 percent increase on admission and does nothing to invest in the business," Rizner said of the possibility admission would be raised 50 cents by the tax. "It would hurt our ability to maintain our position in the market."
Rizner said he worried about patrons feeling like readers who commented on a recent Patch article and said more customers would opt to go to a larger theatre, or use a DVD service like Redbox if prices increased. Less patrons at the La Grange Theatre would also be bad for many businesses in downtown La Grange who are helped by theatre-goers who buy ice cream, or go to dinner as part of a night at the movies in La Grange.
In the most recent discussion by the Village Board, Trustee Palermo suggested that the theatre should be taxed because it received funds from the village's Tax Increment Financing (TIF) district for its renovation.
Rizner disagreed, and said he believed that trustees and residents supported the theatre getting TIF funds to preserve the theatre's history as a destination in La Grange, which a tax could then undo. The theatre is also facing some big expenses in the near future, Rizner said, which include repairs to its roof and switching over to digital projectors. Rizner said he believes that by the end of next year the theatre will have to move to a digital format due to film reels becoming less available as movie studios push a transition to digital.
Rizner said the theatre is doing well financially, but was by no means, "raking in a ton of money." The theatre is able to support its operations, he said, which was the idea behind keeping a low cost entertainment venue in the community in the first place.
What do you think? Would raising prices on theatre tickets reduce attendance? Would an amusement tax on tickets in La Grange have a cooling effect on local entertainment options? Would other businesses be less likely to put on ticketed events to draw people to La Grange? Tell us in comments.
7:41 am on Tuesday, June 19, 2012
I would think that the theater would have a good basis for a lawsuit against the city, for creating a tax that singles out 1 business in the entire town.
12:37 pm on Tuesday, June 19, 2012
Maybe LaGrange should learn to live within their means, instead of adding more taxes? I moved back to Chicago because the LaGrange property taxes are so high.
9:51 am on Tuesday, June 19, 2012
One business being targeted for a tax ? One of the few businesses that isn't a restaurant ?
10:00 am on Tuesday, June 19, 2012
Great...then the city(us) have to pay for a lawyer to go to court! Why does anyone have to sue anyone? Were still paying the lawyers for the Gordon Park debacle! Remember-the theatre already got a very soft loan for improvements (they threatened to leave-boo-hoo-after years of neglecting their property all of the sudden it was of historical significance!). The Tivoli, Music Box, Arcada...there is a way of running an old theatre and making it viable (an argument for another time). If the movies are good, people will come(another argument for later). This is not a grand movie palace of old. "I'll go see it when it comes to the cheap show", thats what we call the LGT. 50cents is not a make or break! So, in the end it's much ta-do about nothing and we have to tip our hats to a balanced budget! Excelsior!
10:36 am on Tuesday, June 19, 2012
Thanks for your comments guys. Do you think this would influence other businesses (whether here already or considering La Grange) who might want to charge a cover of some sort for an event or performance?
10:56 am on Tuesday, June 19, 2012
Do not impose an amusement tax!! I have friends who drive from the city, the south suburbs and way out west to go to the La Grange Theatre and eat, shop and drink at the wonderful downtown. The movies are just as much a retail/entertainment space as Starbucks.
10:58 am on Tuesday, June 19, 2012
I think that raising the ticket price would matter to people who go to the "cheap theater"..that's why we go! I also think that with the amount of restaurants in La Grange they would get more revenue from a sales tax then a tax on 1 business. I know that I would go even less then we do know if it was even .50 more since it adds uo for a Family and then since many times it is tied with ice cream or dinner out..I would rather order pizza and go to Redbox or Family Video!
12:37 pm on Tuesday, June 19, 2012
Do not tax the movie theater! Many of us supported the financial support of the city during the renovation -- it just seems counterproductive to now tax the very business the village was committed to supporting. In addition, ticket prices have increased in the past several years, getting ever closer to matinee prices at the larger theaters that offer more amenities (sound, seating, etc.). Draw people away from our theater, and we draw them away from our restaurants and coffee shops.
1:36 pm on Tuesday, June 19, 2012
For $6.25 I can go to Classic Cinemas matinee (up to 6pm) and get stadium seating and free refills on any size drink and any size popcorn. If a tax will increase the current $5.50 price of a La Grange theatre ticket that does not offer these same amenities to nearly the same price, it will drive me and others to Elmhurstm Oak Park, or Downers Grove to Classic Cinemas. Oh - and by the way, 98% of the time I go to a movie, I bring a friend and we we go out to eat in La Grange. La Grange's loss will be these other suburbs' gain. Pam
2:39 pm on Tuesday, June 19, 2012
Thanks for your perspective Pam.
4:19 pm on Tuesday, June 19, 2012
People seem to forget that the La Grange taxpayer bailed out the Theater owners by giving them $1,000,000 that does not have to be repaid because they said they could not raise their ticket price over $5.00 to fund the renovations themselves. Then the minute they got the money, they raised their prices to $5.50. Looks more like crony capitalism to me. Politicians giving their friends taxpayer money for free so they can make a buck.
4:40 pm on Tuesday, June 19, 2012
Pam and others make very valid points. People go to the LGT because of the price. Small businesses like mine, Red Mango, Cold Stone, etc rely on the Theather and the restaurants in town in order to get people in our stores.
While I hate to see the police lose out on their new cars, and the other cuts that have been made, I don't think taxing one small business is going to do anything but hurt the economy of LaGrange. And that is what the Theater is...a small business: it employs your children, it creates sales tax from concessions, and it brings people into the town that shop at the other small businesses.
To the trustees: How many of you are self-employed?
I wonder how employed people would handle it if their employer said, "OK effective today, the Village of LaGrange is short on funds, and we are going to cut your pay by ?? % and give it to the village, oh and by the way, our company is the only one that has to take a pay cut.". In essense, a paycut is what you would doing to the LGT and the other small businesses in town. Giving all of us a paycut. I know for a fact there are business owners in town who are hanging on by a thread. The trickle down could be devastating for LaGrange.
By the way, I'm pretty sure the above mentioned people would be looking for a new job.
Rocky Mountain Chocolate Factory
8:12 pm on Tuesday, June 19, 2012
Thanks for sharing your opinion, Jean. It's great to hear from a small business owner in the community.
12:53 pm on Wednesday, June 20, 2012
Jean-I'm with ya in spades baby! Matthew & my other fans are probably sick of me chanting the same old mantras but here we go with my lunchtime rant: "Its only .75 cents!" I see people at the show all the time with thier kids(and themselves) wrapped in Juicy & Uggs, etc...all of the sudden everyone's crying poor! The ultimate aim here is cause & effect: go to the show, buy some ice cream, have dinner, whatever. As Jean said, your supporting the great collective.
3:19 pm on Wednesday, June 20, 2012
Thanks Anthony, and I never get sick of hearing your opinion! I love the back and forth.
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Re: A Tax that would only hit a theater? 22 Jun 2012 18:01 #38672
In the late '60s, a local theatre owner made the argument that the admissions tax he was being charged was unfairly, and possibly illegally targeted at his business, while other venues were free to charge admission without the tax. The city council refused to discuss the matter, so the owner closed the theatre that was within that city's jurisdiction. He got a second job and added that to his Summertime income from his drive-in, which is located out of the city.
5 years later, a new city council removed the tax and the owner reopened his theatre.
Nowadays, it is common to see cities charge admissions taxes. As far as I've studied it, the practice appears to be legal, so long as it's evenly applied. Even cover charges can be viewed as admission, when arguing the point.
The cities have successfully excluded their own events (fairs and the like), and some non-profit efforts. However, if it's commercial and the tax is not being applied across the board, the owner might possibly have a legal case against the city.
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