Meals Tax Disproportionately Hits Families

Guest Post by Elizabeth Schultz

Ostensibly, the Meals Tax Referendum is designed to drive more money into the Fairfax County Public Schools budget to offset the dependency on the individual taxpayer’s personal property taxes.

The Meals Tax Referendum requires no prioritization of spending policies by FCPS, just ‘promises’ – does not guarantee – more taxpayer-generated revenue.

However, there is no decrease to the property tax, only an additional tax increase on food in a county where residents have experienced stagnant wages, slow growth in home values, sequestration and the roll back of high-paying jobs. The combined effect of these has further unbalanced family incomes in the face of a consistent high cost of living.

An increased Meals Tax disproportionately hits families, taxing not just restaurant meals – which families have already scaled back on – but also the prepared items in grocery stores, super-marts, membership clubs and convenience stores. Families take advantage of prepared items because they are trying to meet the demands of schedules complicated by working, commuting, and student athletics and activities.

Fairfax County has also been directly impacted by policies at the local, state and national level which have substantially changed our county’s population. Notably, from FY2009 to FY2017, the student population grew 11.0%, from 168,384 to 186,842.

In the same period of time, the eligibility for Free and Reduced Meals (FRM) increased 45.8%, from 35,750 to 52,129 students. While the FRM student population, a poverty indicator, grew at four times the student population growth, the regular price of meals served to students who do not qualify for Free and Reduced Meals increased 20.0% for elementary lunches and 23.1% for middle and high school lunches.

It appears that the governing of Fairfax County involving the creation and enforcement – or lack of enforcement – of policies pertaining to housing, taxation, land use, transportation, education and economic development, has drastically changed the taxpayer and student population base according the FCPS Capital Improvement Plans over time.

Further taxing a population which is increasing in its poverty statistics is the last thing that will help Fairfax when those who are already struggling to remain here are doing so under subsidies while the balance of the population who have and continue to bear the cost of those subsidies is decreasing.

The households supported by a single income, two-working parent families and FCPS’ own employees, teachers, instructional assistants, bus drivers, cafeteria workers, and support personnel all will be directly impacted by this additional tax increase – as well as the apparent on-going increase of families living in poverty in Fairfax County.

Vote NO on The Meals Tax Referendum: increasing taxes is something we just can’t afford.

-Elizabeth L. Schultz
Fairfax County School Board
Springfield District

This is provided in my individual capacity and does not reflect the position taken by the full Board.

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Elizabeth Schultz is a member of the Fairfax County School Board. You can follow Elizabeth on Twitter @ThinkSchultz

Say No To The Meals Tax On November 8

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.

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Matt Ames is chairman of the Fairfax County Republican Committee.

Meals Tax Could Drop Your Property Value

Guest Post by Spike Williams

On your ballot Nov. 8th you will find a referendum vote on whether or not to add a 4% Meals Tax to the existing Sales Tax of 6%. Let’s examine how this can impact your life as a property owner or prospective buyer in Fairfax County.

It is commonly accepted that real estate values are fluid and tied to changes in the market. Of course there are still those who believe that their property has inherent value based on an array of anecdotal indicators such how much they paid for it, how much they have put into it, or even how much they love it. The truth is that the only indicators that will really determine the value of your home in a competitive sales market are Location, Condition, and a Comparable Market Analysis. The reason I point that fact out is to establish a baseline for my argument that a Meals Tax increase to a net 10% could effect property values and hence your return on investment.

If imposed the meals tax will apply to all prepared foods and beverages, not just those acquired at restaurants, it will also include alcohol when served with a meal, grocery stores (rotisserie chicken, coleslaw…), delis, food trucks, convenience stores, caterers, movie theater concessions, hotel food services, coffee shops, and more. Currently Fairfax County has a competitive advantage over some area jurisdictions like Arlington County, The City of Falls Church, The City of Alexandria, The City of Fairfax, the Towns of Vienna and Herndon and others. Our existing meals tax is 4% less than many of our neighbors. That discrepancy drives consumers to our communities and increases economic activity. One local jurisdiction that could reap some benefit to its business owners would be The Town of Clifton, assuming their governing body doesn’t impose an additional meals tax. Bear in mind though that from a real estate perspective they would be dragged down along with the rest of the area.

You see, Fairfax County (which includes Tysons, Reston, Fair Oaks, Springfield, The Mosaic District and others major economic engines) by way of its lesser tax, draws interest from businesses looking to provide those services and companies who’s employees will consume those goods. This is the essence of economic stimulation – we are, and have been, enjoying the effects of a virtual economic vacuum that draws commerce to our communities. And what does that mean for your property value? You guessed it, it is buoyed by the increased economic activity.

Make your own decision on the meals tax referendum but don’t do it believing that this is free money for schools that won’t have consequences. Changes in the economic landscape always cause ripples.

Cross-posted to Williams Realty NoVA Blog

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Spike Williams is a realtor at Williams Realty. He was the Republican nominee for Chairman of the Fairfax County Board of Supervisors in 2011.

What’s In Your Wallet?

Guest Post by Mick McKeown

Election Day is around the corner and the most common question seems to be which Presidential candidate could you stomach in the White House. While picking the leader of the free world this election might not be the most enticing prospect, another tax is on the ballot in Fairfax County that deserves attention, but is getting buried between clips of Access Hollywood and Wikileaks. Below is how it will read on the ballot:

“The question presented in this referendum asks Fairfax County voters whether the Board of Supervisors should be authorized to levy a meals tax, as allowed by Virginia Code § 58.1-3833, at a rate not to exceed four percent (4%) of the amount charged for the taxable food and beverages. The Board of Supervisors has decided to dedicate the revenues to two purposes, which are specified in the ballot question. First, 70 percent of the net revenues would be dedicated to Fairfax County Public Schools. Second, 30 percent of the net revenues would be dedicated to County services, capital improvements and property tax relief.”

The Washington Post wrote an editorial supporting the tax. The piece has valid points. It discusses the vibrant dining scene in the District and Arlington are growing in spite of the tax. Mentions that people don’t notice the tax or it doesn’t change dining out habits. Lower tips are based on millennials not tipping well and couldn’t be because of the tax. Passing the tax is only going to help the situation according to the Post.

The Post makes no mention of principles. Revenue in the county is down. Growth is stagnant. The taxpayer is expected to carry a larger burden while the County refuses to reduce expenses. This is the first tax, not the last one. If the county was sincere about this tax being a stop gap measure due to an economic downturn a sunset clause would have been included. Instead expect sugar/soda taxes next like Philadelphia and California.

The quickest and quietest way to stop the insanity is at the ballot box. Vote your conscience for President and your wallet on the Meals Tax Question.

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Mick McKeown is a creative and resourceful campaign professional who is well versed in contributing to political initiatives and interacting with elected officials. From Pennsylvania, McKeown now lives in Falls Church with his wife and daughter. He can be reached at www.mypoliticalimpact.com.

Burger With A Side Of Tax

Guest Post by Jorge Reyna

On June 7th the Fairfax County Board of Supervisors voted on a referendum to put a meals tax in Fairfax County. Why a meals tax? What’s it for? And how does it affect us? According to the Fairfax County Board the tax is being implemented to help out schools with the following breakdown:

70% of the net revenues will be dedicated to Fairfax County Public Schools.
30%of the net revenues will be dedicated to county services, capital improvements and property tax relief.

According to the county it is supposed to generate $99 million within the first year….. The county says they need the money because once again schools are underfunded. The questions is why? Year after year, the county asks for more money through bonds that we vote for and increased real estate taxes. Every year they keep saying we need more money, the Supervisors and School Board Members feel they need a raise, and take even more of our money. SO, how does this affect us? Well if we vote yes, according to the Fairfax County website, the meals tax will be implemented on ready to eat food and beverages sold at restaurants, as well as grocery stores, convenience stores and delicatessens at a rate of 4% on top of the sales tax of 6%, for a total of 10%.

Now, as a YR (Young Republican) and a father, 10% is a lot of money. To feed my family of 4, and trying to be conservative with what we buy at a restaurant, we spend between $60 – $80 dollars on food. Adding tip at possibly 20%, you are talking about 30% more on the food you just bought, or $18 – $24 dollars extra. It doesn’t sound like much, but it can add up. Also, this will affect servers, employers, and young people. Young people can spend up to $50 – $100 going out at night, because of this tax, they may think twice about tipping 20%. Servers will lose tips to an already low paying job, and employers may cut down on the amount of staff needed. But let’s say people still go out and not much revenue is lost. Well what’s to stop the county from raising that tax more?

A little background on me, I was born and raised in Fairfax County, possibly one of the few natives you will find. I also went to Fairfax County public schools, and my kids started going there. But the schools I remember are not the same any more. In fact, it got so bad for my kids, we decided to home school them. They classified my child as “special needs” so they could get more money from the county. Is my child different, well yes he is, but does he need to be in a special needs program? The answer is no. The problem with the school system is they are trying to fit all the kids in a square peg, while my child is a round one, as many other children are. How does this relate to the meals tax? Well, the meals tax is supposed to flood the schools with more money and alleviate the problem of low teacher pay and being able to educate our children. But the problem is, schools like the one my children attended, try to get more money out of the government for programs that may not be needed.

The whole purpose of the meals tax is to “help” schools. Maybe it’s time we audit the schools and find wasteful programs that don’t help children, or suck money from the school funds, because let’s be honest, in the end, when you give your money to the government, who knows where it will end up, so just vote NO.

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Jorge Reyna is a former chairman of the Fairfax Area Young Republicans.