Muddled Arguments for the Fairfax County Meals Tax

“Give us more of your money, so we can spend it” is a terrible campaign slogan, and not only because it lacks pizazz and cutesy phrasing. Only your most die-hard tax-and-spenders are supportive, in these tough economic times, of the idea that what we really, really need are higher taxes and more government spending. Unfortunately for those supporting the upcoming referendum on the Fairfax County “Meals Tax” that slogan pretty much sums up the argument for passage. Rather than throw their hands up and admit “that’s all I got,” proponents are trying their best to make their case. In so doing they are putting out some muddled arguments that are unlikely to pass muster.

Rejected by the voters in the 1992 referendum by a margin of 58%-42%, advocates will not let this unpopular idea die. State Senator Scott Surovell, when in the House of Delegates, even tried to pass a bill to take away the requirement to pass it by referendum, which would have given the Fairfax Board of Supervisors, dominated by Democrats, the ability to raise it without support of the residents (if the board voted unanimously to do so). That bill, too, failed (HB 830, 2010 Session).

So now they are back again, trying to pass this new and additional 4% tax on prepared food, which would bring sales tax on prepared food in Fairfax County to 10%. I’m confident that they know the weakness of the slogan “raise my taxes and spend more money!” and worry it will fail to work again. It is a hard case to make, and the arguments for are both misleading and weak.

When I attended the community meeting on the meals tax sponsored by the Mount Vernon Council of Citizens Associations, Mt. Vernon Supervisor Dan Stork exposed these concerns by insisting that he wanted economic development in Fairfax, to both improve the tax base and provide jobs for our citizens. It was like an apology, as if to say “no, really, I like economic development but we gotta raise more money.” He even argued that restaurants, which will be hit hardest by the tax, will “thrive” in Fairfax after passage of the hike. I like Dan, I honestly do, and I think he earnestly loves his community. What he cannot get away from is that this tax has one purpose – more money for the government to spend, or that it will harm the restaurant business, and by extension other businesses, in our county. That’s why he then went through the litany of weak arguments to convince us all that this tax is a great idea and basically no big deal. Mr. Stork was only continuing a strategy put in motion months ago, and which the county supported by sending a misleading mailer to residents at a reported cost of $400,000 in taxpayer funds.

First, the Board of Supervisors tried to sway the vote by asserting that most of the alleged $100 million in new revenue would go to the schools. The amendment text on the ballot, in fact, states “70 percent of the net revenues to Fairfax County Public Schools.” Sound good? Well, not so fast. The board has committed to putting 70% of net revenues into the school budget but not, and this is the important thing, to actually increasing the school budget by that same amount. Yes, you heard that right. So let’s say the school budget is $1.8 billion (from the county, and $2.6B total in 2016) and the tax raises $100 million. Your normal person would then expect the budget to be increased to $1.8 billion plus $70 million. Well, that person would be wrong. It could happen, but there is no legal requirement to do that. The budget could stay at current levels or even be reduced. The “to” action here is merely an accounting action. This money will increase the pot of money available only, which the board is able to spend and allocate as they wish, as long as the 70% is transferred, as an accounting action, into the school budget. Get it?

Second, advocates want residents to believe that the schools budget has been “cut.” This is an old trick. The cuts referred to are from proposed increases, not the actual budget. In fact, the 2016 Approved Budget for the schools increased by 2.2% over the FY 2015 Approved Budget, and the 2017 budget is slated to rise 4.3% over the 2016 budget. Now, planners and administrators may want bigger budgets than they are getting, but it is clearly not accurate to say that the budgets have been “cut.”

Third, the amendment also states that “30 percent of the net revenues to County services, capital improvements and property tax relief.” So, again, one would expect that there would be some proposed “tax relief” in property taxes. Wrong again. That has also not been proposed, and in fact the County increased the property tax take by $100 million recently. Think you are going to get $30 million back? Think again.

Fourth, advocates have deemed this the “Meals Tax” and have implied at public meetings that it boils down to a few more cents on restaurant bills and will only impact the profits that restaurants make. They say that paying the tax is a choice. People can choose to eat out, and pay it, or they can choose to not eat out, and avoid paying it. They would like to leave voters with the impression that the tax will be borne only by fat cats eating steaks at white-table restaurants, so, hey “what’s the big deal.” Turns out this is not true either. You see, the tax is not really a “meals tax” but instead a “food tax” that will be imposed on all prepared food items and accompanying beverages. So that salad or rotisserie chicken you get at Safeway? Taxed. That sandwich and potato salad you buy at the local deli and the diet coke you get along with it? Yep, taxed. If it is food (or accompanying beverage) and it is prepared, it will be taxed. This is highly significant because the tax, which is by its nature regressive, will apply disproportionally to our lowest income residents, not only in dollars but also in frequency. Lower income workers, who may be working multiple jobs, often not during the regular working hours, are more likely to rely on these prepared foods from fast food restaurants, your local deli, grocery stores, 7-11 stores and the like. So sure, fat-cats can either pay or decide not to eat out, but these workers cannot. As Supervisor Pat Herrity, an opponent of the tax, recently wrote in the Mt. Vernon Gazette, the tax “disproportionately hits those who can least afford it — the elderly, single working parents, young students, and people without other options. It is not a white tablecloth restaurant tax; it is a food tax.”

Another muddled argument surrounds the notion, agreed upon by advocates and opponents alike, that Fairfax is not getting its fair share of revenue from the state. The assertion is true, as we only receive 23 cents back from every dollar we send Richmond. But that is where they lose me. If this is true, and it is, then why would we buckle and suck up more taxes here? Shouldn’t we be fighting to solve the problem (i.e. that we are not getting enough back from Richmond) and not surrender once again by assuming even more of a burden ourselves? If we complain about unfair state funds distribution, but then raise more money for ourselves, how do we ever expect to be taken seriously by the budgeteers in Richmond? We already pay higher property taxes, gas taxes and business taxes than most Virginia jurisdictions, so why would we agree to increase our burden more, guaranteeing that the “unfair allocation” issue will continue?

Lastly advocates have tried to leave us with the impression that Fairfax is out there alone rejecting this tax, and that surrounding jurisdictions have it, so it will not negatively affect our businesses. They even have a map on their website promoting this idea. Unfortunately for them, however, while their map is accurate in what it says, the conclusion is not. Only 21% of the residents in Northern Virginia live in areas that have a meals tax. So while it is true that some surrounding cities have it, it is not true that our restaurants will not be placed in a lower-competitive position vis-à-vis surrounding areas.

Responding to my inquiry about the tax, School Board Member Elizabeth Schultz of Springfield District responded, “[o]stensibly, 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. However, there is no decrease to the property tax, only an additional food tax in a county which has stagnated in wages, been subject to sequestration and roll back of high-paying jobs to balance the high cost of living and has been directly impacted by policies at the local, state and national level which have substantially changed our Fairfax County resident population.” Voicing concern that the tax will hit our most vulnerable residents, including children and their parents who are already facing tough times, she noted that while the student population grew between FY2009 and FY2017 by 11%, “the eligibility for Free and Reduced Meals increased 45.8%, from 35,750 to 52,129 students.”

“Further taxing a population which, according the FCPS’ own documentation, is increasing in its poverty statistics, is the last thing that will help Fairfax because it results in further taxing those who are struggling” Mrs. Schultz said.

Fairfax County continues to spend more every year, and clearly the Board of Supervisors wants even more money to spend. Instead of admitting this and defending the increased spending, they are trying to sell a regressive and damaging single-industry tax as a good thing, and using misleading arguments to do so. The real question is this – do we tax and spend more? Or do we deal with our spending problem while promoting commerce, creating jobs and growing, not shrinking, our commercial tax base?

Business activity creates tax revenue. Increased taxes do not, however, create business activity. It seems clear enough to me.

According to Meals Tax opponents, “[a] recent survey showed that 65 percent of residents would vote no on the new tax if it were voted on today, and believe taxes in the county are about right or too high. Only three percent (3%) of those surveyed think we are undertaxed.”

I already cast my vote against this regressive and unfair tax. I am betting the residents will reject these weak arguments and do the same once again on November 8th.

Сейчас уже никто не берёт классический кредит, приходя в отделение банка. Это уже в далёком прошлом. Одним из главных достижений прогресса является возможность получать кредиты онлайн, что очень удобно и практично, а также выгодно кредиторам, так как теперь они могут ссудить деньги даже тем, у кого рядом нет филиала их организации, но есть интернет. http://credit-n.ru/zaymyi.html - это один из сайтов, где заёмщики могут заполнить заявку на получение кредита или микрозайма онлайн. Посетите его и оцените удобство взаимодействия с банками и мфо через сеть.