Mayor Stoney proposes raising city’s meals tax to create funding for new schools, repairs to existing facilities

Just a day before Mayor Levar Stoney is set to give his annual State of the City address last night, he submitted a proposal to hike the city’s meals tax by another 1.5%, bringing the city’s tax on prepared meals to a total of 7.5%.

A presentation by the City’s financial advisors, Davenport & Company, at the December 11th Education Compact meeting indicated the city has approximately $66 million in debt capacity through fiscal year 2023 for City and Schools projects. Stoney says a new funding source for schools facilities is needed in order to increase debt capacity while not negatively impacting core city services and operations.

A comprehensive report released last year estimated it will cost $224 million to construct five new schools and make adequate and necessary repairs to existing facilities.

The city estimates the increase would generate an initial $9.1 million in new funding per year, which would allow the city to expand the current debt capacity and provide $150 million dollars in new capital funding over the next five years in a fund dedicated to Richmond Public Schools. The mayor made it clear these funds would placed in a special reserve, only available to fund school facilities.

The reassurances come after the city’s meal tax was hiked 1% to the current rate of 6% in 2003 to fund renovations to what became the Dominion Energy Center downtown. At the time, officials promised the increased rate would be phased out. That never happened, and the extra revenue was eventually reallocated to pad the city’s general fund.

“For the last year, I’ve said that when it comes to meeting the critical needs of school facilities, the only option that’s off the table is doing nothing,” Mayor Stoney said in a statement. “It’s time for us to invest boldly in our most important resources–our children. We owe it to the children of our city to act.”