The Fairfax City Council has voted 4 to 3 to levy a 1 percent tax on all meals served in the city's 75 restaurants starting July 1.
At last week's public hearing, city officials predicted that the new tax would bring in close to $400,000 in the 20,000-population city. Council members have earmarked the added income for road improvements.
Some area restaurant owners, who said the 1 percent tax was discriminatory, feared that it would reduce business if customers were required to pay the additional charge on their bills.
"There should be an additional blanket sales tax instead of being put just on restaurants," said Leonard Milliken, owner of Tastee Diner, on Lee Highway. "But, it's in the future, so people won't start to fuss until they have to pay."
The ordinance apparently imposes the tax on all food ready for immediate consumption in grocery stores, convenience stores, and fast food and service restaurants. Pet food and frozen foods are excluded from the tax.
Sterling E. Rives, assistant city attorney, said the council will discuss at its April 23 meeting whether prepared food sold in convenience stores and carry out salad items available in supermarkets should be taxed. He said the ordinance does not specifically mention the type of pre-packaged, ready-to-eat food sold in convenience stores.
Fairfax City had been the only city in Northern Virginia without a restaurant tax. Alexandria levies a 3 percent tax on its restaurant customers, and Falls Church charges a 1 percent tax.
Council member Patrick A. Rodio, who opposed the 1 percent tax, said restaurant owners and employes probably will suffer the most from the tax. He said the levy might tempt customers to leave smaller tips for waiters and waitresses.
"I don't like new taxes and find them always abhorrent," Rodio said. "We shouldn't go out and tax to get money just because we happen to have 75 restaurants here."
Rodio said restaurant owners will be "burdened with additional administrative costs and forms to fill out" as a result of the tax.
But Fred Berick, assistant manager of Bob's Big Boy restaurant on Main Street, said the new tax will not dissuade his restaurant's steady customers.
"I imagine 1 percent won't make much of a difference," Berick said.
In other matters, the council voted to lower the city's real estate tax rate by 5 cents from $1.18 to $1.13 per $100 of assessed value. The council also approved a $29.8 million budget for fiscal year 1985-86.
The new rate will lower the property tax bill on an average $98,000 home by about $50, not counting any assessment changes.
The budget, which takes effect July 1, includes $1.1 million for the city's transportation fund, $3 million for the capital projects fund and a 4 percent cost-of-living increase for city employes.
The council set aside $500,000 for a possible feeder bus system from Fairfax City to the Vienna Metro station, off I-66. City officials said the proposed commuter bus would alleviate traffic problems when the station opens late next year.