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Chesto Means Business | Jon Chesto

Restaurant group scores two key victories in state budget

Bob Luz, president of the Massachusetts Restaurant Association, scored two victories for the group’s members.

Restaurant owners in Massachusetts might want to cover Bob Luz’s tab the next time he pulls up at a table. At the very least, someone should buy him a round.

The president of the Massachusetts Restaurant Association just came through for his members, thanks to a lobbying blitz on Beacon Hill. As lawmakers fled the State House for their August vacations last week, Luz walked away with two important victories.

The first was long anticipated: a $2 million allocation to promote the industry. The second win — an exemption from the upcoming sales tax holiday — was the exact opposite: Luz didn’t even know he needed to lobby for it until a few weeks ago.


Retailers have long pushed for an annual sales tax holiday weekend, but not restaurants. This used to be an annual campaign for the merchants on the Hill, until a permanent August holiday was enshrined in state law last year as part of the “Grand Bargain” negotiations that also led to increases in the minimum wage and a new paid family and medical leave program.

Restaurant meals were always listed among the exemptions to the holiday weekend in the past. But for some reason, the word “meals” was left out of the tax holiday language in the Grand Bargain law.

Apparently, no one noticed at the time. Everyone at the table assumed meals would continue to be exempt. After all, the sales tax isn’t really a factor in most diners’ purchasing decisions. (New Hampshire imposes no sales tax at stores, but does impose a 9 percent tax on restaurant meals.)

However, in mid-July, the Department of Revenue sent out a notice informing the restaurant industry that, for the first time, meals would be tax-free in the holiday planned for Aug. 17 and 18. The news surprised the Massachusetts Restaurant Association and its allies at the Retailers Association of Massachusetts.


The biggest problem with this change: Alcohol would still be taxed. That meant that restaurants would have to re-set their point-of-sale systems to accommodate some items that would be taxed and others that would not. Restaurateurs flooded Luz with angry messages, complaining that this would be difficult to do, particularly for just one weekend.

Luz then pleaded with legislative leaders and Governor Charlie Baker for help. The response was swift. Baker proposed an amendment to the state budget to remove the word “meals” from the Grand Bargain law, and lawmakers quickly went along with the simple switch.

That state budget also included the $2 million for the restaurant industry and language calling for the establishment of an 11-member task force charged with developing ways to promote the “growth and vitality” of the sector. Among the soon-to-be-created commission’s responsibilities: figuring out the best ways to spend that $2 million windfall, funded by the state’s new casino revenue.

This promotional money was a big priority for House Speaker Bob DeLeo. He announced the funding and the task force in a Greater Boston Chamber of Commerce speech in March. At the time, DeLeo called the industry a vital piece of “our civic culture,” one that needed a boost amid a time of uncertainty and change. He referenced the recent closure of long-established restaurants. (Think: Durgin-Park and L’Espalier.)

The Senate initially didn’t go along, but DeLeo eventually won out in the budget deliberations that ended last month.


Score another one for Luz. He has been on a mission to let everyone know about the factors that weigh heavily on the industry here, including high real estate and labor costs.

Luz still faces one more legislative battle, and this one will be tougher to win: He’s pushing a controversial bill that would significantly curtail beer gardens. These popular outdoor venues pose serious competition to many of his group’s members in Boston. The craft brewers rely on a series of one-day licenses to keep their gardens growing, but Luz says those types of licenses are supposed to be used for special events, such as charity fund-raisers. He says he just wants to level the playing field a bit.

Passage of Luz’s bill, as written, seems less likely than finding Coors Light on tap at one of these craft beer gardens. But Luz’s push might just prompt some kind of reform to the state’s antiquated liquor laws, perhaps giving his members one more reason to raise a glass when he walks in the door.

Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.