Fairfax County residents could decide in November whether to establish a 4 percent tax on restaurant meals that would generate nearly $100 million annually for schools, county services and property tax relief.
The Board of Supervisors, in a budget work session Tuesday, agreed to vote June 7 on whether to place a proposal on the general-election ballot to levy a tax on all prepared foods and drinks — from meals served at sit-down restaurants to takeout grub at grocery stores, fast-food franchises and cafes.
Such purchases are already subject to the county’s 6 percent sales tax.
The idea of a meals tax has been debated in Virginia’s largest jurisdiction for years as officials have struggled to generate new revenue amid a sluggish economy and an aging and increasingly less-wealthy population.
Fairfax schools are spending $1,000 less per student than in 2008, said Pat Hynes, head of the School Board, and have increased class sizes and frozen teachers’ pay to compensate.
With commercial tax revenue stagnant and a growing need to spend on schools, social services and infrastructure, the county must diversify its revenue sources, officials say. Last month, the Board of Supervisors raised the property-tax rate by 4 cents, which will cost the owner of an average home an extra $304 in the coming fiscal year.
“We don’t have any way to relieve the burden on our real-estate-owning taxpayers,” said Supervisor Jeff C. McKay (D-Lee), the budget committee chairman. “This is a long way from a done deal, and speaking for myself, I don’t think it’s a mistake to ask voters if they’re willing to do this.”
The ballot question would specify how the revenue would be divided, supervisors said. The proposed language requires a 70-30 split between schools and county services, although some supervisors said they would push for a 50-50 split when the board votes next month.
A meals tax would not apply to food and beverage sales within the towns of Clifton, Herndon and Vienna, which levy their own taxes on restaurant food.
Hynes said that “school advocates are geared up this year, and they’re ready, willing and able to help get the word out to voters” about the need for a meals tax.
Representatives of the business community and restaurant owners who attended the workshop were less enthusiastic. They said there are several unanswered questions about the proposal, including exactly how the new revenue would be spent. And they expressed concern that a new tax would make it harder to compete with restaurants and cafes in neighboring Prince William and Loudoun counties (Arlington and Alexandria have their own meal taxes).
“It makes dining more expensive,” said Claude Anderson of the Clyde’s Restaurant Group and the Restaurant Association of Metropolitan Washington.
Michael Forehand of the Northern Virginia Chamber of Commerce asked, “Will voters understand what they are voting for?”
Supervisor Catherine M. Hudgins (D-Hunter Mill), who has advocated for a meals tax for 20 years, said the wording of the proposed ballot question could “constrain” the board because it specifies that the money allocated for nonschool uses must be spent on county services, capital improvements and property-tax relief.
She said she will nevertheless support putting the question on the ballot when the proposal comes to a vote next month.