Twelve speakers voiced their opinions at a public hearing on the proposed two percent meals tax increase this past Monday in council chambers. They were evenly divided. Predictably, those opposed represented restaurants, and those in favor were mostly educators.
The tax increase passed unanimously and cleared the way to trim the $8.8 million school budget shortfall by at least half for fiscal year 2011. The tax will sunset in 2013.
Latasha Suggs, teacher and Co-President of the Roanoke Education Association said, “It was unfortunate with this most recent budget our elected officials in Richmond have reneged on their promise to Virginia’s children.” Suggs urged continued patronage of the city’s restaurants.
Kerry McGraw, a second-grade teacher at Garden City Elementary School, collected 600 signatures pledging to support Roanoke City businesses affected by the meals tax increase.
Thomas Becher, President of the Becher Agency (tba), spoke on behalf of the Hospitality Association. The association opposed the meals tax increase, taking the position that it unfairly targets one industry. Earlier in an interview at a Chamber of Commerce lunch, Becher was sympathetic, saying, “all agree the schools need help but one industry carrying the weight is a long-term mistake in strategy.”
Becher could foresee groups opting for a more tax-friendly locale to hold their conventions. “When you’re talking about a 19% lodging and meals tax for a large group, versus 11% at a place like The Homestead, it makes it hard to compete,” said Becher. He felt that even with a sunset clause, business could continue to be lost if groups get used to meeting at other locations.
Becher told council that association members represented 40% of the revenue generated from meals taxes. He asked them to not “cut off the hand that feeds you.”
Other restaurateurs opposing the tax increase had opinions that ran along the same lines. Mike Flannery, of Flannery’s Irish Pub, fears having to cut staff that includes teachers who work part-time during the summer months.
Tokyo Express restaurant owner Michael Jirousek said he’d move his business elsewhere. He said that the meals tax increase “tells companies not to come here.”
When it came time for council debate, all were on the same page in recognizing how far the schools have progressed; no one wants to see them “backslide.”
Councilman Dave Trinkle, who owns two restaurants said, “Personally I’d like to see a broader approach.” Restaurants are big employers and he worried about hurting labor. Trinkle questioned the sustainability of the effects of the tax hike. He asked what will happen when both the stimulus and the 2% meals tax expire, saying “What are we going to do then?” Trinkle added that there has been no synergy success in the Joint Services committee that would yield savings for the city and the schools.
Councilwoman Gwen Mason put City Manager Chris Morrill — only five weeks into the job — on the spot when she asked for his opinion. Morrill said that while working on economic development in his past job, he realized that “education is one of those foundational things.” The meals tax will buy some time.
Those in attendance responded with enthusiastic applause when Morrill proclaimed that “the community has to absolutely rally around the restaurants.”
By Valerie Garner [email protected]