City streets, like Hillcrest between C and B streets, are in need of repair. The city of Madras is considering a 5% prepared food tax to help fund road maintenance and help with funding police.

The City of Madras is considering a 5% Prepared Food Tax to fund street repairs and hire additional police officers.

The proposal might sound familiar to those who have lived in Madras for more than six years. In 2019, Madras government proposed a similar 5% restaurant tax to fund road maintenance. The proposal was set for a citywide vote in May, 2020. However, soon after the COVID pandemic shut down much of society in March 2020, the City Council withdrew the ballot measure. The council at this time indicated it would revisit the idea when the economic conditions stabilized. Now, apparently, is that time.

The city recently reached out through Facebook to try and gauge the public’s support, or lack thereof, of such a program. Feedback is requested back by July 4.

The tax would apply to all prepared foods sold at restaurants, delis, fast food establishments, and similar businesses.

According to the city’s Facebook post, a recent analysis by Capital Assets Management identified a $14.3 million shortfall in needed street maintenance across Madras. Property taxes do not fund road maintenance; they are used for police operations and general fund.  Roads are funded from gas taxes and franchise fees.

The city estimates this tax could generate $1.4 million annually, with approximately 50% of that coming from non-residents who travel through or visit Madras.

Madras city government was considering a similar tax back in 2019 but pulled it off the table when the COVID pandemic struck.

Other options the city has considered in this process included a transportation utility fee, a franchise fee, and a local gas tax. The city found that a prepared food tax generates more revenue than a gas tax; would increase with inflation, unlike a fixed gas tax; applies to a consumer choice and is not a necessity; and is a pass-through tax to the consumer, not the business.

When the city considered this prior to COVID, there was push-back among local restaurants and many locals as well, though new tax ideas rarely are met with wide public support.

At this point, the city wants to know what the community feels about the idea in 2025.  The survey is open through July 4. Visit www.surveymonkey.com/r/MadrasCommunitySurvey to take the survey.