While the folks in the rest of the Commonwealth are engaged in existential struggles for the heart and soul of the party (or they’re just in the middle of the same personality driven food fights as usual), Fairfax County’s GOP has found a way to unite every part of the party: opposition to a local tax hike.
It was only a matter of time before the Meals Tax issue raised its ugly head again. Fairfax has been down this road before. Back in 1992, a countywide referendum rejected the Meals Tax by a 58% to 42% vote in a rare April Special Election. Despite relatively high turnout (almost 25%) for a single-issue Special, the tax still failed. Twenty years later, the Democrats on the Board of Supervisors are back again, pushing for a 4% tax on prepared foods in the County, which will bring in an estimated $90 million per year. The County is currently in the middle of a review process, with a Task Force made up of various stakeholders from across the County preparing a report to the Board with recommendations.
Coming on the heels of the successful Meals Tax referenda in Henrico and Middlesex counties, supporters of a Meals Tax in Fairfax appear emboldened, and have begun lobbying the Board of Supervisors for a new referendum. They don’t seem at all deterred by the fact that the County just saw property assessments rise and the Board just approved the largest property tax hike since 2007, bringing the property tax rate in Fairfax County to $1.09 per $100 of assessed value. While the increase is modest, the increase coupled with rising assessments means the average Fairfax property owner just saw their tax bill go up an average of $350. This happened at the same time that Arlington County lowered their rate a full penny.
Fairfax County is much different today than it was in 1992. Besides the increase in population, from around 880,000 in the 1990s to over 1 million today, Fairfax County is far more affluent than it was just a few decades ago. With a gross county product of around $95 billion, Fairfax County has a larger economy than Morocco and the County’s annual budget will hit $6.97 billion this year, larger than South Dakota’s.
Of that $6.97 billion, $1.8 billion will be transferred to the Fairfax County Public School System, which has approved a $2.5 billion budget for FY 2015. Both our County budget and the FCPS budgets are the largest in the Commonwealth of Virginia.
With that kind of revenue coming in, why do we need a Meals Tax?
Well, proponents claim that we’re broke.
No, really.
As you can see by the ad (above) the Fairfax County Federation of Teachers is running, our roads are in disrepair, public safety funding is at risk, and our schools are woefully underfunded. So, of course, we need more taxes.
$2.5 billion for schools is clearly not enough. If we just had that additional 3.6% increase, our schools won’t be “starving” anymore.
It strains credulity.
Other proponents of the Meals Tax argue that we need the additional form of taxation to “diversify our tax base,” which is heavily reliant on property taxes. While it is true that property taxes are the largest single revenue source in the County, there are plenty of other tax and licensing fees, including the car tax and BPOL taxes, that provide the County with revenue. For anybody to take the “tax diversity” argument seriously, those proponents arguing in favor should be arguing to make any new Meals Tax revenue neutral – lower other forms of taxation so you get your diversity without increasing taxes. But nobody has seriously made those arguments (although I did suggest that was the only way a meals tax proposal would be taken seriously a few months ago in an Fairfax Economic Advisory Commission meeting).
Adding a 4% tax to prepared food is a hard pill to swallow for taxpayers who have seen taxes at all levels – federal, state and local – increase significantly over the last few years. Whether it was Obamacare, the McDonnell transportation plan, or local property taxes, Fairfax County residents have been hit over and over again with higher taxes. If there is ever a right time for local tax increases like this one, now is definitely not it.
There is a silver lining – the Meals Tax is a godsend for the GOP here. This issue, like no other, has united all of the disparate parts of the Republican Party in Fairfax. Whether you’re establishment or Tea Party, libertarian or moderate, GOP support for the tax has been non-existent. Throw in that you’ve got a competitive open seat Congressional race pitting Delegate Barbara Comstock, who voted against Bob McDonnell’s transportation plan, against Dranesville Supervisor John Foust, who voted for the recent property tax increase, you’ve got a perfect wedge issue for November.
It goes without saying that the Meals Tax is a bad idea. If the $90 million it could potentially generate is that necessary, there are other ways to find it that don’t involve a regressive tax on food, regardless of the dollar value of the tax. Arguments that the tax will hit tourists aren’t persuasive either, as the majority of prepared food sales are by residents, not tourists. Tax increases at any level should be a last resort, not a first resort, and the arguments made by FCPS and the FCFT that they critically need this funding aren’t persuasive. Despite the billions we spend on education, no amount ever seems to be enough for the schools. And if we really need to diversify the tax base, revenue neutrality is a must. I don’t see that happening.
With solid Republican opposition and an already galvanized restaurant community (as you can see by the sign my son and I are posed with), Meals Tax supporters are going to have an uphill battle to get this passed, no matter how they do it or when it shows up on the ballot.
Even my almost-four year old son knows this is a bad time to raise taxes. It’s great to finally have an issue that unites the GOP.
