By Fredrick Kunkle
Washington Post Staff Writer
Sunday, November 29, 2009
Would you gladly pay more for a cheeseburger today if it keeps your local librarian working tomorrow?
Several members of the Fairfax County Board of Supervisors think so. So do supervisors in neighboring Loudoun County, who hope the General Assembly will allow them to impose a meals tax, too.
Despite the recession, a growing number of Northern Virginia officials say they think people would be willing to pay more when dining out to avoid further cuts in budgets for schools and local government.
Facing nearly a half-billion dollars in red ink, some Fairfax officials go even further. They say now is the time to raise user fees or impose new ones, such as charging high school students who play team sports. Others want to reinstate a $25-a-year car tax that was repealed three years ago.
Of course, the politicians acknowledge that any new tax would be risky. With the economy flirting with Great Depression-size disaster for two years, some governments big and small have embraced the conventional wisdom that now is not the time to be raising taxes.
But more than 30 states -- some run by Democrats, some by Republicans and all of them facing whopping holes in their budgets -- have done just that, according to groups that follow taxation trends.
This week, Virginia Gov. Timothy M. Kaine (D) took a step closer to joining them when he said that he would consider raising taxes to balance the state's books after learning that its projected budget hole had widened by an additional $2.9 billion in this and the next two fiscal years.
"History says you absolutely do raise taxes in a recession," said Jon Shure, deputy director of the state fiscal project at the Center on Budget and Policy Priorities.
Many state taxes that exist today first appeared during the Great Depression, Shure said. Mississippi, for instance, imposed its first state sales tax to pay for jobless benefits and other welfare programs.
"Budget cuts hurt people, too," Shure said. "You simply can't do this on spending cuts alone."
Some governmental watchdogs, however, say the idea of taxing meals, or anything, in the middle of a recession turns their stomachs.
"States that follow that advice have people leaving them," said Grover Norquist, president of Americans for Tax Reform, referring in particular to New York and California. "And before they leave, they send their money away and their children away."
The Republican Party of Virginia has rapped Kaine for daring to think about raising taxes and has begun reminding people that the Democratic candidate for governor, state Sen. R. Creigh Deeds (Bath), was thumped not so long ago after a campaign in which he suggested that he would support higher taxes to fix the state's road system.A mixed bag
Most state and local governments that have raised taxes this year relied on tried-and-true measures such as sales, income or sin taxes. Scott D. Pattison, executive director of the National Association of State Budget Officers, said 12 states raised personal income taxes, 12 increased sales taxes, 6 increased corporate income taxes, 16 increased cigarette taxes and 4 increased taxes on certain alcoholic beverages, bringing in a total of $23.9 billion in the past fiscal year.
Some jurisdictions have been particularly inventive in finding revenue. Six now tax digital goods, such as downloaded ring tones, music, movies and books, according to Americans for Tax Reform, an anti-tax think tank. More than 20 states and the District imposed taxes on plastic shopping bags. New Yorkers will pay more for a limousine ride. Maine's moose hunters will shell out more for tagging Bullwinkle. South Dakota's tourists will pay more to visit.
And Alabama's Department of Corrections signed a five-year lease with a company to drill for oil on prison grounds. (Presumably, the well shafts are not close enough to prison walls to be used as tunnels.) Last month, the department announced that a mini-gusher had been hit that produces 500 barrels a day.
It's enough to make a taxpayer thirst for a slug of whiskey. But watch out: Illinois nearly doubled the tax on liquor, to $8.55 a gallon.
And a smoke? It will cost an extra $3 a pack to soothe jittery nerves in Connecticut now that the tobacco tax has been raised.
Still, Fairfax County supervisors see diminishing options as tax receipts dwindle and demands for service continue apace. They have long been envious of the meals taxes used by Alexandria, Falls Church, Vienna and Fairfax City. Arlington County also has a meals tax, and something more: It is one of only five Virginia counties with the authority to impose the tax without a voter referendum.A looming shortfall
In the coming fiscal year, Fairfax County faces a projected $316 million shortfall, and its schools appear to be running short by at least $176 million. Enacting a 4 percent meals tax, the maximum a county can charge under state law, would raise $80 million a year for its cash-strapped government programs and schools. Adding a meals tax could spare homeowners some of the burden of financing local government, proponents say.
"I think it's time for us to start looking at this seriously," said Supervisor Gerald W. Hyland (D-Mount Vernon), who has been lobbying behind the scenes for the tax since the board's retreat this past summer. He said a meals tax would bring in about as much as a property tax increase of 5 cents per $100 of assessed value and would be spread over a larger group of people.
"The best thing to say to a room full of people is that even though we're in a tough time and a recession, you still go out to eat," Hyland said. "It's discretionary."
County leaders have tried that strategy before -- and failed. In 1992, a proposed meals tax was put to voters in a referendum and failed by 58 to 42 percent. In 2004, county leaders asked the General Assembly to exempt Fairfax County from having to hold a referendum on a meals tax. The Senate approved, but the House did not.
Hyland said the budget picture is so grim that voters might be more willing than in the past to support a meals tax. He also said there appears to be enough support on the 10-member board to pass a resolution setting up a referendum, particularly if the chairman, Sharon Bulova (D) lends her weight to the idea. In separate interviews, supervisors Penelope A. Gross (D-Mason), Catherine M. Hudgins (D-Hunter Mill), Jeff C. McKay (D-Lee) and Linda Q. Smyth (D-Providence) expressed tentative backing for the idea.
But would diners go for it?
Woody Snodgrass and Mike Claxton -- both of whom are 42, work as crane operators at Fort Belvoir and live in Frederick -- pondered the question after downing cheeseburgers and fries at Five Guys on Route 1 in the Hybla Valley area of Fairfax.
Their answers neatly framed the debate.
"I would," Claxton said. "You could take 25 cents out of my pocket, and I'm not going to feel it. If it was going to help, I'm all for it."
"I wouldn't," Snodgrass said. "I need to see what they're doing to tighten their belts first, before I'm putting more money out of my pocket to bail them out of trouble."
For what it's worth, Snodgrass picked up the tab.