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Tuesday, May 17, 2016

Supervisors to vote on meals tax referendum on June 7

A sign in Silverado.
On June 7, the Fairfax County Board of Supervisors is scheduled to vote on whether a meals tax should be put to voters on the Nov. 8 election ballot. 

If the board approves the referendum, Fairfax County citizens will be able to vote yes or no on a meals tax on Election Day. Under state law, counties can only impose a meals tax if it is approved by voters in a referendum.

The county’s Department of Management and Budget estimates that $96 million in revenue would be generated from a 4 percent meals tax in the first year it takes effect. This estimate is based on taxable sales of food and drinks in calendar year 2015.

A meals tax would diversify the county’s tax revenue base, which currently is mostly dependent on property taxes. When the real estate tax rate is increased, all property-owning residents are affected, regardless of their ability to pay. A meals tax would apply to tourists, commuters, and travelers, as well as residents who choose to dine out. For example, it’s estimated that tourists who patronize Fairfax County restaurants would generate $22.8 million in one year.

At its June 7 meeting, the BoS is also scheduled to vote on a proposal for distributing 70 percent of the revenue from a meals tax to Fairfax County Public Schools, with the balance allocated to county services, property tax relief, and capital improvements, including police and fire stations, libraries, and schools.

Most nearby jurisdictions already have a meals tax. Alexandria, Arlington, Falls Church, and the City of Fairfax have a 4 percent meals tax. Herndon has a 2.5 percent meals tax, Vienna’s is 3 percent, and the District of Columbia’s is 10 percent.

According to County Executive Ed Long, a meals tax would apply to “prepared food and beverages at restaurants, lunchrooms, cafeterias, coffee shops, cafes, taverns, delis, pushcart operations, and hot dog stands.” It would include alcoholic and non-alcoholic beverages served with a meal. It would not apply to food sold from vending machines or in grocery stores, except ready-to-eat food, such as meals from delis and salad bars.

37 comments:

  1. And so continues the relentless assault on county residents' disposable income. The supervisors will love this tax because, unlike property taxes, they don't have to defend it on an annual basis. A meals tax just continues to soak up revenue without regard to economic conditions. There's also no nexus between a meals tax and property taxes. The latter won't be affected by the new revenue. Rather, the money from meals taxes provides a huge slush fund for the supervisors to blow on their favorite projects. And then there's the unsubstantiated claim about the tax raising $96 MM. The last figure has never been substantiated and, contrary to the county staff's claims, will mostly be paid by locals. So, it's time to once and for all stop this relentless assault on taxpayers' wallets. Our taxes have been escalating at an obscene enough pace without adding yet another one.

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  2. This whack-a-mole keeps popping up. How many times has this been voted down?

    It is beyond egregious to raise real estate taxes and impose a meals tax in the same year.

    Keeping the runaway FCPS budget on the rails should not be put on the backs of restaurant owners. How unfair that they are being singled out to bail out our boondoggle of a schools system.

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    1. Honest question; how does a 4% meals tax break anyone's budget or present a serious issue to a restaurant owner?

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    2. Adam: The appropriate way to evaluate a meals tax is by examining it in relation to other taxes that are currently in effect. Adding a 4% meals tax raises the tax rate on eligible food items to 10%. That means a $40 trip to Burger King for a family of four carries a $4 tax bill. Do that enough times and that meals tax adds up really fast. If you're at a restaurant, there's also a 10 - 15% tip to pay. So, you're going to end up paying an additional 20 - 25% for that restaurant meal. Restaurant owners realize that eating out is discretionary. So, it makes sense for them to oppose additional taxation that threatens to keep customers at home.

      It's unlikely that a meals tax will bankrupt anyone. But that's an overly simplistic approach to the subject. You may have money to burn, but that doesn't apply to everyone. The county readily admits that a meals tax will disproportionately affect the elderly and those with lower incomes. Moreover, since it's obvious we're going to continue being gouged with property tax hikes, I cannot justify surrendering even more cash to yet another tax.

      I've always been impressed by the fact that Fairfax is dominated by a bunch of upper middle class affluent wage earners with no compunctions about spending everyone's money to fund their priorities. However, without some limits, we're going to find ourselves entering an era of confiscatory taxation from which it's going to be impossible to escape. So, this issue is about more than a meals tax. It's about dissuading the BOS from finding even more things to tax.

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    3. Because we spend anywhere from $10,000 - $15,000 per year on restaurant meals, all told. We would be paying several hundreds more per year in taxes. It would probably be wise to cut that back on this expenditure, and perhaps this would be a good incentive.

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    4. The 4% is just a start. I spent some time in Roanoke a few years ago and the meals tax was 7%. It would be nice to know if there is a max tax rate. We are currently at 6% taxes, I can see this going to 7% within a year or two to help fund Metro. So Adam where is your break point? Like others have said $80 meal, 10% tax, 20%-25% tip and now you easily over $100. Basing this on a family dinner for four people. It might not make much difference for singles and couples, but us family folks will be eating out less.

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    5. We're only talking about the meal tax here, other taxes and tips are irrelevant. If you want to pay 25% tip, the cumulative effect of that extra tip making 35% doesn’t make the meal tax egregious, it makes the total cost of the meal egregious. The discussion is about the meal tax, not what you choose to tip or the existing 6% food tax. My question still remains how a 4% meal tax is going to break anyone's budget, and more importantly, I don’t understand what the effect would be on a restaurant. Honest questions here, not trying to be a dick. Also, where is this 10-15k a year on restaurant meals number coming from? That's 10-15% median household income! Some of the data I found on the web is closer to 3-5%

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    6. Adam, I was referring to my family's habits specifically. Spouse and I both work in Fairfax County, don't pack breakfast or lunch very often, and eat dinner out maybe 2x times per week, and happy hour occasionally as well. Just doing some rough math here. I know many people whose habits are not ALL that different from ours, either.

      Rest assured, I will be packing my lunch more often should this pass, and we will cut back on the restaurant trips as well.

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  3. It leaves a poor taste in my mouth to go out to eat with my kids at Silverado, and know that the ownership does not value my kids' education. I wish they would take down the sign.

    I support the meals tax, although I wish it would go 100% to the schools.

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    1. Not supporting the meal tax doesn't mean not valuing a kid's education. It may just mean they don't support the tax.

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    2. Anonymous5/17/16, 12:07 PM What concerns Silverdo is the effect this tax will have on reducing its customer base. That means less revenue coming in and fewer taxes be paid to support the schools.

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    3. I am not sure I see the nexus in the restaurant wanting to be able to make a profit and that meaning they do not believe in education. I know my disposable income has gone down over the last few years and we do not dine there much anymore. We used to go once a month now we go once or twice a year. I am not complaining just that when prices go up you can not eat out which means less business for restaurants. I for one usually eat only take out now a days to save on the tips.

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    4. I agree with 12:07. Our family of five who eat out 1-2 times a week have taken restaurants who are fighting the meals tax like The Great American Restaurants (Carlyle, Coastal Flats, Silverado, etc.), Clyde's Restaurant Group and others off our list of places to eat. I know other friends have done the same.

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    5. Awesome, I'll happily deal with a fewer families and children at Silverado's. Please feel free to relegate yourselves to restaurants that I don't go to. I love all of the Great American Restaurants and Clyde's is great, as well.

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    6. I don't have kids and I prefer to dine at restaurants where parents don't allow their kids to mess up the floors and tables and then leave others to clean up after them. So, if you aren't heading over to the restaurants that oppose the meal tax, then so be it. Thanks. My dining experience will be more pleasurable without you. I eat out multiple times a week. I oppose the tax because why should I pay more for my meals to benefit your family?

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  4. Hey, 12:07 PM. KMart, Pep Boys, Home Depot, and CVS all equally do not value your kids' education. Actually, I think you were being sarcastic. Must've been. My turn for sarcasm: "Gas stations should be the ones arbitrarily singled out to sacrifice their profits for our pleasure. And if they disagree, it means they hate children."

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  5. I look at the county test scores on a map, and I see a central corridor of the county doing excellent - essentially just west of the beltway from Great Falls down through Vienna, west Annandale, and West Springfield. Then you have Mason District schools which almost all struggling and the Herndon area which isn't doing too well either.

    Why the disparity? Well, generally the schools that are doing poorly have an disproportionately high number of non-native English speaking students and students on free and reduced lunches. Some of these schools are then given access to title 1 funding, but that doesn't seem to be enough to get these schools the help they need.

    Is there waste in the school system - I have no doubt. The fact that the latest school budget sessions with the public had everything on the table to be cut EXCEPT the largest driver of increasing costs, which is employee retirement plans shows that it was little more than a political ploy to get more money for the school system.

    That being said, its the government - waste is almost a given. I'd rather that waste be located in the school system whose goal is to educate our kids rather than be wasting money targeted towards real estate developers or trees that are going to get bulldozed.

    Am I sold on the meals tax? No. But I'm not sold against it either. I'd like to know more about how the school system plans to use its 70% of the money and how it would go to help the achievement gap in Mason District.

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    1. Jeff: Money talks which explains why the sons and daughters of the Outer Beltway bourgeoisie are destined to succeed. Mason will never overcome the money advantage and political clout that's concentrated out there. So, the question isn't whether Mason will benefit from more school funding. It won't. Rather, it's whether the already privileged will ever stop their campaign to turn every one of their schools into a public prep school. It takes a lot of cash to set your kid on a path to the Ivy League and this meals tax won't be the end of it. These guys are going to keep using the school board to hammer away at the BOS until they get every undeserved nickle they're demanding. They already have three supervisors in their pockets. So, it's about time to at least temporarily end this farce and defeat this latest money grab. Over half the county's budget currently goes to the schools and that should be plenty.

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    2. More money is not going to help the achievement gap in Mason District. More money is not going to help our school system. Our education system is broken in many areas and in many ways. We should be fighting and demanding changes to the education system instead.

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    3. lol, the "outer beltway bourgeoisie"

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    4. This report in the Washington Post does much to explain what can best be described as economic segregation: https://www.washingtonpost.com/lifestyle/report-finds-segregation-in-education-on-the-rise/2016/05/17/fef274e0-1c55-11e6-82c2-a7dcb313287d_story.html

      FCPS is a shining example of what happens when we lose judicial over site and one party rule resorts in cronyism. Annandale High School has been academically and athletically decimate by the segregated school boundaries drawn up by the current school board.

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    5. What makes anyone think that even if the tax is passed the schools will get more money? They might get 70% of the new restaurant tax money but that does not mean they will be getting more money overall. Do you really think that Penny & Sharon and their crew will not decrease the money they receive from the overall budget so they can give more money to social services?

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    6. If you do the math, you'll quickly discover that the BOS has set too many priorities for the 30% of the meals tax revenue that doesn't go to the schools. So, while spending for social services probably won't decrease, it won't increase either. The passage of a meals tax also won't stop the incessant demands for increased school funding. Even if the meals tax generates the wildly optimistic $90+ MM the county's bean counters claim, that's hardly enough to satisfy those spendthrifts who want to drive down classroom size to prep school levels. After the school board burns through the meals tax money, the school funding lobby will be right back demanding even more tax money. That means these exorbitant annual property tax increases we've been experiencing won't stop.

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  6. Most nearby jurisdictions already have a meals tax. Alexandria, Arlington, Falls Church, and the City of Fairfax have a 4 percent meals tax. Herndon has a 2.5 percent meals tax, Vienna’s is 3 percent, and the District of Columbia’s is 10 percent.

    Why should Fairfax be any different? No one's forcing you to eat out.

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    1. Falls Church, Fairfax City and Herndon are small cities that don't have nearly the revenue stream as Fairfax. I live in Mason to avoid the ridiculous taxes in Arlington and the District. And who benefits if stop spending at restaurants and take out establishments? The county has gone on record as assuming that a meals tax won't affect residents' dining habits. If this tax proposal passes, they better be right.

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  7. maybe if they weren't wasting money planting trees in places they will be torn down, we wouldn't need this

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    1. so true and funny

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  8. Re: "...with the balance allocated to county services, property tax relief, and capital improvements...." It's nonsensical to make claims about providing property tax relief by enacting yet another tax. That's not tax relief. It's tax shifting. Moreover, considering the champagne tastes of too many county residents, I'd expect property taxes to remain unaffected. Moreover, gouging $96 MM from what promises to largely be locals is going to have some major repercussions. This isn't Arlington with it's vibrant social scene. It's Outback country which means that much of the revenue would be derived from families who aren't likely to be as affluent as the swells who are behind this tax proposal. So, I expect that $96 MM revenue projection to decline significantly, particularly in the restaurant sector.

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  9. How about a compromise? Business improvement districts that are actually being served by the county and improved via measures like extending Metro – for instance, Tyson’s and Reston – how about we stick them with a meals tax. All the rest of the unincorporated parts of the county that are being left to flounder and rot – leave them alone.

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    1. I think that is a great idea. I would be behind that.

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  10. The hotel/motel tax in Fairfax County, which does not affect local residents, is 6%; of which 2% is for general transient occupancy (whatever that means), 2% for tourism and 2% for regional transportation. This information comes directly from the County web site. Compared to other jurisdictions and states this amount is ridiculously low. Thank the hospitality industry and its effective lobbying for this one. They complained when it recently went up 2%, the amount that goes to promoting tourism, from which they directly benefit. Too many times, the bottom line trumps the greater good. There is also the sometimes legitimate suspicion of local government, A very sad situation.

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    1. Hospitality industry groups lobbied against those higher taxes because they realize that visitors to this area are more likely to stay in the District or Arlington where there's something going on. The best way for hotels and restaurants in Fairfax to compete is to keep prices down, so slapping their visitors with higher taxes is counterproductive.

      One of the difficulties that restaurants are encountering in opposing this meals tax is in convincing the public that they mostly operate on relatively thin profit margins. Although many eateries may draw respectable business on Friday and Saturday evenings, they're also largely empty for much of the rest of the week. The slow economic recovery also hasn't helped their bottom lines. While it's a simple matter for the BOS to propose hitting their customers with yet another consumption tax, the burden this places on restaurants should be made clearer. So, I'm hoping that the restaurant industry's reps will focus more intensively on the real impact of this proposed tax in the coming months.

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  11. Nice try 12:23. Fairfax County has the lowest hotel tax of any nearby jurisdiction, including Loudoun County and is way below the District's 14.5%
    An additional 1 to 2% increase that would go to Fairfax County and still equal the 7+ percent charged by our neighbors would not prevent visitors from coming here.

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    1. It is futile to compare a tourist and business mecca like the District to a largely bedroom suburb like Fairfax. However, I believe you'll find that having a 1.25% lower transient tax rate than Arlington and no meals tax is immensely useful to Fairfax hotels when booking tours and meetings. The hospitality industry has suffered heavily recently because business have cut back on meetings and travel due to adverse economic conditions. So, I wouldn't be too quick to dismiss the attraction that saving a few dollars has to them.

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  12. How about a tax on stupidity, Fairfax can rake in allot of cash in this category.

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    1. you spelled a word wrong bro. I won't tell the tax collector

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    2. oh yea, looks like the IRS may come after me.

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