Eating Local Fattens Up the Local Economy

Originally published in the Lebanon Reporter on June 16, 2005

So Boone County is going to increase the food and beverage tax by 1% to help build the Colts a new stadium. I guess I don’t mind too much. A first-class stadium and a winning sports team can do a lot for the state.

The debate over the tax has served to remind me of the significant role the food and beverage industry has on our local economy and quality of life. Lebanon is home to over 40 restaurants and Boone County has over 80. Over 1,200 hard-working Boone County residents earn a paycheck in food and beverage businesses. That represents a significant portion of our local economy.

I’m hoping this tax issue will prompt us to think about how our food and beverage spending habits affect our local community. For instance, have you stopped to think that dining out locally, rather than out-of-county, helps feed the local economy beyond the price of your meal? 

When we spend money locally, that money continues to work in the local economy. Economists call this the multiplier effect. Besides the taxes it generates, it also helps pays the wages of people who work at the restaurant, most of whom live here.  These folks use their earnings to pay rent or mortgages, fill their cars with gas, and spend their money on other local goods and services. The restaurant itself spends money on utilities, property taxes, etc. That money continues to work in our local economy. When we spend money outside the local economy, it leaves the community all together and then another community benefits from the multiplier effect.

If we want even more of our dining-out money to stay in the community, we can make the choice to patronize locally-owned establishments. A recent study in Illinois found that that for every $100 spent at a local chain restaurant, an additional $48 is generated because of the multiplier effect. That same $100 spent at a locally-owned restaurant generates $68 in additional economic activity. So the bottom line is that eating out locally, especially at locally-owned restaurants, is a great way to boost our economy.   

I realize that every dining-out dollar will not be spent locally. My family often eats out of county. To my son’s great dismay there is not a Chuck E. Cheese’s here in town and on some rainy weekends a McDonald’s with a play area is just what he needs to release some energy. Although my wife and I have spent many special occasions at the Bijou, sometimes a change of pace is nice or we want something not available locally- sushi and good bagels both come to mind.

We’re making a commitment to eat locally most of the time. If more of us did the same, it would have a significant impact on our local economy. Successful restaurants result in more restaurants. I’m not sure if Chuck E. Cheese will ever make it to Lebanon or not but I’m staying optimistic about the sushi and bagels.