County pitches meals tax to legislators
Henrico County officials made their pitch for a 4-percent meals tax to the county’s General Assembly delegation last week, telling the group that the proposed tax was their last resort to create revenue and close an $18-million shortfall in next year’s budget before raising real estate taxes, cutting services or laying off employees.
Henrico lacks the authority to implement such a tax on its own, so officials want the General Assembly to grant it that authority, with the provision that the county’s Board of Supervisors must unanimously support it.
A total of 204 other Virginia localities already have meals taxes, including 45 other counties – four of which were specifically granted the right to implement the tax by the General Assembly.
“We have evaluated all the alternatives, and this has the very least consequence,” County Manager Virgil Hazelett told the nine delegates and senators who attended. “People will object – some people – but they will not object to police officers, to teachers [and other county services].”
Hazelett and Finance Director Brandon Hinton presented an impassioned argument to the Assembly delegation, recounting how in just their past three fiscal years, they have trimmed nearly $97 million from their total budget and eliminated or frozen 721 vacant government and school positions in an attempt to compensate for $84 million in lost revenue from declining real estate taxes and state funding.
The county also has refunded $317 million in debt through bond refinancing since 2009 and has weathered the storm without cutting services, laying off any employees or raising taxes, Hazelett said.
But a significant jump in the amount localities must pay into the Virginia Retirement System on behalf of employees looms large on the horizon, as do road maintenance and construction needs in Henrico that total $418 million but have no current funding source.
County officials have pointed to the fact that Henrico is the only state locality that maintains its own secondary road system but lacks the authority to collect a meals tax. (Arlington, the only other county that maintains its own roads, was granted the right to implement such a tax in 1990.) Locally, Richmond imposes a 6 percent meals tax, Ashland a 5 percent tax and Louisa County a 4 percent tax.
Henrico officials estimate that about 40 percent of all prepared meals purchased in the county are bought by non-Henrico residents, which would lessen the impact of such a tax on county residents. And unlike a real estate tax increase, residents would be free to avoid a meals tax by not dining out or by limiting their dining excursions, Board chairman Dick Glover said.
“A meals tax is not something we’d impose on them that they can’t dodge if they want to,” Glover said.
A 4-percent meals tax would generate between $18 million and $20 million annually, Hazelett estimated. He and board members told the Assembly delegation that they likely would not designate that money for any one particular use but rather apply it as needed.
Delegate Jimmie Massie wondered aloud whether it would be difficult to convince other members of the General Assembly to support a tax increase for just one locality.
Deputy County Manager John Vithoulkas, who will assume Hazelett’s position in mid-January, suggested that the delegation could take another route by supporting the passage of language that would authorize all counties that maintain their own road systems to have the same taxing authorities as cities. (Cities inherently have the right to implement meals, cigarette and admissions taxes.)
Henrico could enact a meals tax if a majority of voters supported the idea in a referendum, but they seem leery of trying that route again after voters defeated it in 2005 by 153 votes.
Varina District Supervisor Tyrone Nelson told the delegation that without the Assembly’s approval of the issue, Henrico’s would not survive unscathed.
“If you can’t support a meals tax, then our issues are not going to go away,” he said. “This is a last resort. A tax is going to come up or we will have to cut services or lay people off. We don’t do that in Henrico, and we don’t want to do this, but this is where we are. We need your help.”
The Varina Ruritan Club celebrated its 80th anniversary with a banquet Nov. 10, during which it presented several annual awards, including Policeman of the Year – to Henrico Officer Aaron M. Lancaster (top) – and Firefighter of the Year – to Julian T. Lipscomb (second from top).
The club also received a plaque from the Henrico Division of Fire (third from top) expressing the division's appreciation for the club and its support of fire prevention programs. > Read more.
The grand opening of The Rink outdoor ice skating rink at West Broad Village will be held Saturday, Nov. 14, beginning at 11 a.m. with skating and family activities. At 4 p.m., grand opening festivities – featuring exhibitions of ice sculpting, ice skating and cheering, as well as fire pits, costumed characters, and food vendors – will begin. Skating costs are $8 for children and $10 for adults, with $4 skate rentals available. Parking is free. The Rink is located at 3939 Duckling Drive, Glen Allen. For details, visit http://www.Facebook.com/TheRinkWBV > Read more.
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CalendarGayton Library hosts a discussion of classic films and occasional DVD commentaries every month at 6:30 p.m. This month’s selection is “Lost in America” (1985) about a husband and wife… Full text