City Council votes to hike meals tax by 1.5% after five hours of debate, public comment Monday evening

City Council votes to hike meals tax by 1.5% after five hours of debate, public comment Monday evening

Councilmembers voted 7-2 to hike the tax on prepared meals to a total of 7.5% just after 11:00 PM Monday evening at City Hall.

Richmond Restaurant Group owner Michelle Williams speaks out at Richmond City Council Monday evening.

After five hours of debate and public comment at City Hall Monday evening, the Richmond City Council voted 7-2 to raise the city’s meals tax by 1.5%, bringing the city’s tax on prepared meals to a total of 7.5%.

Five members of Council voted yes including Addison, Agelasto, Hilbert, Jones, Newbille, Robertson, and Trammell; Gray and Larson voted against the measure.

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.

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 the new funding source for schools facilities is needed in order to increase debt capacity while not negatively impacting core city services and operations.

The city estimates the increase will generate an initial $9.1 million in new funding per year, allowing 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.

Many spoke out at the meeting against the measure–restaurant owners and non-owners alike–but the measure passed just after 11:00 PM Monday evening. The tax hike will take place July 1st, 2018.

Mayor Stoney, reacting to the news of the tax’s passage, released the following statement:





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