Opponents put in their two cents on a proposed $2 event ticket tax at R.I. House panel hearing

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4 days ago

The VETS, shown center left in a view from the Rhode Island State, is among the venues that would be affected by a bill that would allow municipalities to add a $2-per-ticket tax for venues with more than 800 seats. (Photo by Alexander Castro/Rhode Island Current)
Members of the House Committee on Finance on Thursday appeared to see the need for a bill that would let municipalities impose a $2 tax on tickets to large venue events despite opposition from event promoters and business owners.
Providence Democratic Rep. Rebecca Kislak introduced her bill with a shout-out to her mom in Miami by recounting her mother's words: ''Why are you in the news about this ticket tax? What's the big deal? All big metropolitan areas and cities have taxes like this to support the cities where events are held.' So thanks, Mom, for that.'
Kislak's H6334 was submitted at the request of the Providence City Council as part of a multipronged approach to fend off budget chaos following a multimillion dollar settlement last November between the city and the state education department. Kislak is also the sponsor of H6162, by Providence Mayor Brett Smiley, which would allow the city to increase its total tax levy in fiscal year 2026 beyond the state-mandated 4% growth cap.
The tax levy bill passed the House floor 56-17 Tuesday after about an hour of heated discussion, with House Republicans joining progressive Democrats in opposing the bill's passage. The legislation lingers still in the Senate, where it was heard in committee for the first time, also on Tuesday.
Kislak's event ticket tax bill bears the signature of at least one Providence Democratic co-sponsor, Rep. David Morales, who opposed the levy bill, plus five other Providence Democrats, and Democratic Reps. Brandon Potter of Cranston and June Speakman of Warren.
While the bill was designed with Providence in mind, it would authorize any municipality to adopt a local tax of up to $2 per ticket on events held at 'large venues,' or those with 800 or more seats, per the bill's definition. The Division of Taxation would be responsible for collecting the tax and then redistributing it to municipalities.
Revenue from ticket taxes would not count toward the tax levy hike cap codified in state law. That complements the tax levy hike legislation, by allowing towns and cities to up their tax income without risking the chance of going over the 4% annual limit on how much municipalities can raise taxes.
'Every city and town, increasingly, is facing difficulties in overreliance on property tax as the main workhorse for how we can do our business, how we can take care of city services,' Providence City Council President Rachel Miller told the committee Thursday, adding that the bill 'is one kind of tool in the toolbox' to help dig the city out of its fiscal hole.
Miller estimated the new fee could generate around $3 million annually for Providence, which would help offset the rising cost of services in the capital city without discouraging event attendance.
The bill was held for further study Thursday, as is standard practice.
City Council Chief of Staff June Rose said in an email Friday that a Senate companion is in the works.
Anthony Vega, a spokesperson for Mayor Smiley, said the city administration is still reviewing the bill.
The state's Division of Taxation has read the bill, however, and thinks it needs to be redrafted. In a letter to the committee, Neena Savage, tax administrator, testified that parts of the bill as written are 'ambiguous' and suggested filing it under local tax statutes rather than the state's broader sales tax code.
Asked about the tax official's take, Kislak said via text Friday that she was planning to review everything over the weekend, and 'would be glad to provide additional clarifications based on the feedback last night.'
'This is enabling legislation and I'm confident the cities and towns will refine this in locally appropriate ways as they write ordinances, if they so choose,' Kislak wrote.
Kislak's bill managed to coalesce support among her colleagues. It also did the same for the opposition — venue managers and hospitality lobbyists — who showed up Thursday night to oppose the bill, many of whom argued that the proposed fee is small, it will disadvantage Rhode Island in a competitive live entertainment market.
'It's not so much about passing it on to the patron,' said Dan Schwartz, general manager of The VETS Auditorium. 'You know, what we hear when bills like this come up is, 'We're just going to skip bringing our show to Rhode Island.''
Written testimonies opposing the legislation also came from the legal counsel for the Providence Bruins, South Kingstown Town Councilor Jay G. Wégimont, and Joseph Paolino Jr., former Providence mayor and noted downtown real estate magnate.
'This legislation targets the very institutions that help drive Providence's economic engine, and at the worst possible time,' Paolino wrote, adding that his luxury hotel The Beatrice is always booked when a popular show or game is in town.
Contrasting the naysayers was the Finance Committee, including a relentless Rep. Teresa Tanzi. The South Kingstown Democrat asked many questions of the industry advocates who came to testify, although she was befuddled as to why they even showed up.
'This $2 thing — I'm shocked that you guys are even here opposing it, to be quite honest with you,' Tanzi said. 'Because in the larger scheme of things, your ticket holders are being ripped off on so many other levels, and the city is being inconvenienced on so many other levels.'
Tanzi suggested that if proprietors were truly concerned about ticket prices, they would investigate different options for ticket delivery — like Dice, a platform that allows people to resell tickets only at face value, and only through its own app, rather than secondary markets.
Tanzi also grilled Lawrence Lepore, the general manager of the Amica Mutual Pavilion. Tanzi asked Lepore to what extent the state subsidizes its largest concert venue at 14,000 seats. Lepore replied it's about $27 million a year, including debt service.
'So you're not self-sustaining anyway,' Tanzi said.
'The operation is self-sustaining. But of course, the debt service is not,' Lepore replied.
'We subsidize it to a tune of $27 million a year?' Tanzi asked.
'That's correct,' Lepore said, and Tanzi concluded with a 'Thank you. Thank you very much.'
Rich Lupo sold his titular concert venue in 2017, but the longtime music promoter warned that Providence is already 'a secondary city in the booking world.'
'[This bill] would just piss them off,' Lupo said of booking companies. 'I think it could be $1, it could be $10. You just don't want to anger the powerful agencies, and bands as well.'
From his seat on the committee, bill co-sponsor Hull was canny with Lupo, pointing out that he's known him for decades, and fondly recalls how Lupo grew his titular venue since opening it in 1975.
'I've seen what you're capable of doing,' Hull told Lupo.
That's why Hull was firm that the businesses should be capable of weathering a $2 surcharge — especially places like the Amica Mutual Pavilion, which is housed in the tax-exempt Rhode Island Convention Center but still benefits from city services.
Sharon Steele, speaking on behalf of the Jewelry District Association, disagreed. She pointed to another Smiley proposal and Kislak bill for a 7% 'consumption tax' on the city's parking lots and garages. The ticket tax would add 'insult to injury' for downtown venues already burdened by tax policies, she said.
Hull told Steele he subscribes to the Rhode Island Philharmonic — Steele was once on its board — then narrowed his eyes, smiled, and made a case for the value of expression: 'The arts are special. And if I had to pay an extra $2 to see the arts, I'd be more than happy to pay it.'
'I appreciate that, but the Philharmonic's not doing well these days,' Steele said, adding that such plights are common right now for nonprofits. 'And we're sure not getting any help from the feds.'
'The $2 is necessary,' Hull replied.
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