Guest Post by Matt Ames
In just a few short days, Fairfax County voters have an extremely important decision to make that will significantly affect our local economy. They will decide whether or not to add a 4% “meals tax” on all restaurant meals and prepared foods they purchase in the County. This proposed tax is on top of the existing 6% sales tax, which will make the total tax 10%. This will nearly double the tax that County residents currently pay.
The tax will apply to meals and beverages purchased at every kind of restaurant, coffee shop, food truck, convenience store and more. Even prepared foods such as a rotisserie chicken purchased in a grocery store deli will be taxed. In short, if you don’t cook your food from scratch in your own kitchen, you will pay a higher tax.
The pro-tax crowd has carefully honed their message; a vote for the tax will “support our schools” and “raise teacher salaries.” However, as is usually the case, these arguments are misleading at best and an extreme oversimplification of the real issues voters face.
As they make up their minds and head to the polls, voters deserve the clear facts.
The Meals Tax will be the second $100 Million tax in one year. Earlier this year, the Board of Supervisors raised property taxes by 6%. In the last five years, property taxes have increased a whopping 26%. But that’s not all. Other taxes and fees have increased during the same time period as well.
Again and again, Fairfax County residents have stepped up and paid the taxes they have been asked to pay. But despite billions in tax revenues received, our County government has spent even more. In fact, the School Board alone projects a $134 million budget shortfall in the next fiscal year. The County currently projects its own $79 million budget shortfall. Combined, the County is $213 million in the red without any serious plan to address the problem other than coming to its residents for more money.
The claim that 70% of the money collected by way of the tax will automatically go to the schools is untrue. The Board of Supervisors will continue to decide each year how much money to transfer to the School Board. They are not legally bound to increase the School Board budget by the amount the meals tax brings in. This means that today’s promises of plenty may be offset by tomorrow’s revised priorities.
Even if the School Board gets more funding, there is no guarantee that the money will be spent directly on teacher salaries or children’s education, or that every school in the County will benefit from the increased funding.
The Meals Tax is a regressive tax that will hit vulnerable Fairfax County resident populations such as low-income working families, senior citizens and young people the hardest. All County residents will pay the additional tax whether they can afford to or not. There are no exceptions for those who may be struggling. A new meals tax may force some residents to make difficult choices. Even the Washington Post has had to admit that “Levies on meals, like most sales taxes, are regressive; as a percentage of income, they hurt the poor more than the rich.”
The Meals Tax unfairly singles out the restaurant and food services industry. The restaurant business is intensely competitive and prone to failure. Many operators are small business owners. The average profit margin is 3%. Even small increases in costs or reductions in sales can force a restaurant out of business and put people out of work.
There is no question that the tax will negatively impact an industry that provides 40,000 good paying jobs right here in Fairfax County. As one local restaurateur recently summed it up, “There is no way I can raise my prices by 4%, how can I expect my customers to pay 4% more in taxes and not have it make a difference?”
The Meals Tax is not a new idea. In 1992, the Board of Supervisors proposed the same idea, and the voters said NO. In 2014, the Board brought it up again, but under pressure from residents and businesses, decided to wait. Now they are back and the measure is on the ballot.
It is critical that voters say NO to the Meals Tax on November 8.
Matt Ames is chairman of the Fairfax County Republican Committee.