A task force formed to assess whether the Fairfax County Board of Supervisors should hold a meals tax referendum is shying away from making a recommendation one way or another.
In its final report, to be presented to the board on Tuesday, the task force outlines the pros and cons of a meals tax and assesses issues like the timing of a potential vote, but leaves it to the elected officials to make a decision.
“This committee was pretty evenly divided, almost split 50-50,” said task force co-chair Kate Hanley, former secretary of the commonwealth and Board of Supervisors chairwoman. “I think [the report] gives the board a very focused way to look at the issues surrounding a referendum.”
Due to restrictions in state law, Fairfax County can only enact a meals tax through voter referendum, unless the General Assembly grants the county an exemption. The tax, which would apply to all restaurant meals and prepared foods from delis, would be limited to no more than 4 percent.
The county last held a referendum on a meals tax in a special election in April 1992. About 58 percent of voters voted “no,” and the proposal failed.
All of the local towns and cities surrounding Fairfax County have meals taxes, as towns and cities can enact the tax at the local council level without holding a referendum.
Meals tax supporters say that the county needs more revenue to meet needs like growth in the school population, repairs to aging infrastructure, stagnant employee wages and other unfunded needs.
The meals tax would decrease pressure on the board to continue to raise real estate taxes and would collect revenue from people who work in and visit the county but don’t live there, the supporters wrote in the task force report.
Opponents dispute the notion that the county needs the revenue to address its needs and say that the county has other tools, such as budget management. Business groups also say it is unfair to target a single industry with a tax.
Further, opponents on the panel said that the tax would have a negative impact on low-income families and senior citizens.
Mark Tate, who represented the Restaurant Association of Metropolitan Washington on the task force, said the tax would also reduce the wages of tipped employees by up to 20 percent, because diners are likely to offset the tax by tipping less.
“We know this because we have members both within meals tax jurisdictions and outside of them,” he said.
Despite the deep differences among task force members, the other Co-Chair Tom Davis, a former congressman and Board of Supervisors chairman, said the process allowed all members to be heard and for everyone involved in the process to learn more about the issues surrounding a referendum.
“Everybody comes out of here with a thorough understanding of the law and the possibilities of a meals tax,” Davis said. All but one of the 40 task force members—who represented county employee unions, advocacy organizations, civic associations and business groups—voted to approve the final report at the group’s last meeting Wednesday.
Arthur Purves, of the Fairfax County Taxpayers Alliance, disputed some of the facts and figures included in the report and said he felt his opinions were not adequately reflected. He provided his own report stating that the county could achieve its goals by limiting employee compensation.
While not taking a position on a meals tax one way or another, Hanley said “there is a powerful argument” for allowing voters to decide the issue.
“I am not optimistic at this time that it would pass because the opposition is very focused,” Hanley added.
Davis said that, should the Board of Supervisors proceed with a referendum, the proposal needs to be well thought-out and the justification carefully explained.
“This is a tough environment to pass anything,” he said. “Voters are in a cranky mood.”
The Board of Supervisors could theoretically put the referendum on a ballot as soon as this November. The task force report also outlines pros and cons of holding the vote in each of the next three election cycles.