Healthcare legislation and taxes make life tough for Royalton deli

by Rob Roper 

Brenda Cohen

Brenda Cohen has been running RB’s Delicatessen in Royalton, Vermont, for twenty years. The small, family run business employs fourteen people, two full-time and the rest part-time. True North Reports asked her what the challenges are facing a small business in Vermont.

“It’s very tough. Extremely tough,” said Cohen. “I do a lot of hours. I have a high, high payroll because we’re open a lot of hours and we need two people here at a time because you can’t have anyone here left alone…. Up until three years ago we were doing absolutely great. Then when the recession hit we went right down hill.”

Asked what role Montpelier plays in helping or hindering RB’s success, Cohen didn’t hesitate. “”Taxes! We’re taxed on our profit. And then you’re taxed on the inventory. And then you’re taxed again when you sell the stuff. My husband has been complaining for years that we’re double taxed.”

The new tobacco tax has been particularly harmful. “When we first opened, we did one hundred fifty cartons a week. We do fifty a week now. And [the politicians] think they are getting more money. They are not. It blows me away. My employee went to West Lebanon, got a carton of Camels for $53 and no tax. Mine are $75 with tax. That’s a huge difference. So, I don’t see where they’re going to get more funds by raising [the tax], because people, especially here, are just going to go to West Lebanon.”

Cohen also worries that recent talk of a tax on soda or candy or both will become a reality in the future. “It’ll kill us. That would be so stupid.” Rather than raising taxes, Cohen believes Montpelier should be doing the opposite for businesses like hers to survive. “I say lower the prices of stuff. Lower the tax. That would stop people from going to West Lebanon.

The competition is not just from things like soda and cigarettes. “It’s 30 cents a gallon less [for gasoline] in West Lebanon. That’s a lot of money. It’s worth to drive down – and then while you’re down there, you get all your stuff that taxable [in Vermont].”

The recent healthcare legislation also has Cohen worried, particularly the likelihood that a payroll tax would be implemented to pay for all or part of the program. “I wouldn’t be able to afford it. I’m just squeaking by now. I’ve been here twenty years. It’s not like I’m just starting out. If we had a mortgage still to pay, we would be closed.”

Cohen does not currently offer her employees health insurance, but not because she doesn’t want to. “”That’s just the financial reality…. I agree [people] need healthcare. My girls have nothing. But where can it come from? [Peter Shumlin] hasn’t said where it’s going to come from.”

RB's Deli

Proponents of the single payer healthcare make the point that it is not fair for businesses like Cohen’s to not offer health insurance when other businesses do. That creates a competitive advantage for RB’s. But Cohen sees it a little differently. “I just don’t know how I could pay for it. I mean, the bottom line is how could I pay for it? I don’t even take a salary myself, because I cannot afford that.

The realities of running small, family businesses that make up the backbone of Vermont’s economy just don’t seem to penetrate the Statehouse dome. “My mom works here, she’s 86 years old,” Cohen explains. “I don’t have to pay her. She does a lot of hours for me. This is her entertainment. She just comes and runs a register and, otherwise, she’d just be sitting at home watching TV, and basically dying. This gets her out, lets her socialize. She said it’s the best thing that’s ever happened to her.” Cohen had to receive a waver allowing her mother to work in the store for no pay.

Cohen says her customers are feeling the pinch as well. “They say they have no money. With the gas, and then the heating in the winter, you know, it’s one or the other. They’re always under the knife for something.” As for the future of her store, “Well, I’m 64 years old and I want to be done. I’ve done it twenty years. I work six days a week. I do a lot of hours and hopefully this year things will look up so I can sell it. But anyone who come in, I don’t know how they’re going to do it, having to pay a mortgage. So, I think it’s bleak.”