Meals Tax Extravaganza

Click to read our Meals Tax FAQs document (image from UVA Weldon Cooper Center) 

Click to read our Meals Tax FAQs document (image from UVA Weldon Cooper Center) 

In this meals-tax-for-schools edition, our goal is to help you sift through the arguments, understand basic facts, and provide a personal take with links to Meals Tax FAQ responses and RVA Dirt’s analysis of alternative funding options (our Money for School Facilities document is coming soon).

Process Update 

What’s happened?

On January 22nd, Mayor Stoney announced a plan to generate $150M to pay for school facilities by increasing the meals tax 1.5%.

On January 29th, School Board, City Council, and the Mayor gathered for a battle royal at the quarterly Compact meeting. The RTD’s Justin Mattingly provided coverage, and RVA Dirt was on the scene to give us the presentation and video.

Yes corner was Newbille, Jones, and Robertson, claiming the immediate facilities need and trust in the administration’s vetting of the proposal.

No/Undecided corner Gray and Addison, raising questions about the validity of the facilities plan. Larson and Agelasto wanted to know about alternative options revenues and Trammell wanted additional time for input. 

The following day, RTD’s Mark Robinson posted this count and reached out to a few members for comment. Councilman Addison wrote about his concerns with the facilities plan and limited scope of the proposal.

On February 5th, an Organizational Development meeting was held and the RTD’s Mark Robinson and Richmond Magazine’s Sarah King provided a recap of public and City Council comments. After much debate, a motion to hold a public hearing on February 12th was approved with 5 votes (Jones, Newbille, Robertson, Addison, and Hilbert). No votes (Gray, Larson, and Agelasto) and Trammell (abstain), cited additional public input or time to propose amendments as their reasoning.

What happens next?

City Council could vote to approve the meals tax (ORD2018-017) on February 12th. If you have feelings don’t wait until Monday! Votes on this proposal will most likely be decided this week. Contact your City Council members and their liaisons via phone or email (one-click on homepage) today!

On the 12th, you can speak during the opening public comment or when ORD2018-017 is listed on the agenda.

Basic Facts

What’s being proposed?

Raise the meals tax 1.5% to generate $150M over the next 5-years to pay for school facilities.

How will an additional 1.5% meals tax impact my pocketbook?  

For a $100 meal, that’s an additional $1.50, and for a $20 meal an additional $0.30.

What happens if it passes?

Money could not be accessed until July 1st and budget season would continue with $150M allocated to school facilities. The big question is what school will be left off the previously approved list. The School Board would have to adjust their facilities request as it was $74M higher.

What happens if it fails?

Mayor and City Council will have to find another source to raise millions of dollars for school facilities. Timing will be tough as we’re far into budget season. If nothing is agreed to, we’ll lose another year to address emergency needs.

What story can help explain our current situation?

Richmond is a parent and homeowner with a crumbling roof over our child’s room. We know we can’t keep patching the ceiling over Junior’s bed. We need a new roof ASAP to address this emergency situation.

No matter how hard we work to make cuts, we can’t save enough to buy the roof replacement today. It’ll take 5-years with the job we have. We need a loan and the banks won’t give us one unless we increase our income.

We pull up our sleeves and pick up a second job at a local restaurant. It’s hard work and requires sacrifice, but we increase our take home and get the loan. We address our emergency life safety needs and can rest knowing that Junior is not perfect, but at least we can sleep in peace.

Are you interested in alternative ways of raising money for schools?

Read RVA Dirt’s terrific analysis of alternative funding options (our Money for School Facilities document is coming soon).

Click to read RVA Dirt's alternative proposals. 

Click to read RVA Dirt's alternative proposals. 

Do you have more questions?

Read our Meals Tax FAQ document, which links to articles by RVA Dirt’s Jessee Perry, RTD’s Justin Mattingly, and Style Weekly’s Brent Baldwin Q&A with Mayor Stoney.

Garet’s One and a Half Cents

The following are personal thoughts and observations on the proposal:

Meals tax was a calculated effort to take on most politically “easy” battle. Alternatives of cutting services (residents, businesses, and administration gets angry), cutting CIP projects (residents and council members get angry), raising real estate tax (residents and realtors get angry), or cigarette tax (Altria smash), were politically advantageous.

Did the Mayor do his homework? The Mayor wants a vote early in the budget season, but nothing requires Council to act until May. Remember that last budget season the Mayor did not get what he wanted. What Stoney’s banking on is the leverage of an actual proposal to fund school facilities. As we saw on February 5th, he’ll most likely get votes as it will be incredibly hard for members to stand against $150M for school facilities with no consensus on an alternative.

Directing new revenue from the meals tax to school facilities is a HUGE win! Past budget battles were about both raising money and directing it to school facilities. As explained in our update on ORD2016-092, if new money is not directed to an intended purpose it runs the chance of being lost in the general fund land of nowhere.  

There’s an administrative loophole. As explained at RVAGOV, the City Council approves how much money is allocated, and the Mayor/City Administration and School Board/School Administration spend it. But, we learned in 2016 of an administrative loophole that would keep control of money earmarked for school facilities with City Administration. This could be used as political leverage by the Mayor to withhold funding until a more “effective plan” is approved.

Race is integral to this conversation. Here are two viewpoints: (1) Duron Chavis points out the disparity between RPS facilities shows segregation is still here, and (2) Montigue Magruder reminds us that the School Modernization Referendum, which demanded the Mayor to create a plan without increasing taxes, was overwhelmingly supported by black voters. No matter the viewpoint, the solution for our schools cannot and should not be discussed without a full understanding of historical race-based decisions. Race still plays a role in decision-making today and we should question whether actions have consequences that perpetuate this divisive history.

We need improved financial analysis and community engagement from Richmond government. City Finance and Davenport should have presented multiple options for raising revenues to spur debate. With meals being the only vetted and viable option, it raises questions about the recommendation's objectivity and delays any alternatives discussion. February 12th will mark 21 days from introduction to possible approval of 150M. There are valid concerns about public input, and presenting objective information is something that should be improved. RVA Kids Can’t Wait is great for winning a political campaign, but doesn’t raise the quality of dialogue with objective information and transparency.

Improving the quality of financial analysis and community engagement are principled stands, but I’m supporting the meals tax for school facilities to address emergency safety and civil rights needs of our children.

The status quo is unacceptable, and doing nothing is something.

“Let’s be clear: This is a tax on patrons, not restaurants. It’s the most painless and progressive way for a credit-strapped city to raise money without punishing those on the economic margins. It’s a way to get suburbanites — and even visitors from other cities and states — to support the city’s schools.” – Michael Paul Williams