Fairfax County considers meals tax for restaurants, other prepared food

August 10, 2024

That restaurant pasta or gas station burrito in Fairfax County could be facing a price increase after lawmakers in search of revenue began considering an option that has been rejected twice amid heated opposition: a meals tax.

On Tuesday, county supervisors directed County Executive Bryan J. Hill to study the pros and cons of imposing a tax of between 1 and 6 percent on food and beverages prepared in restaurants, grocery stores and convenience stores — a response to the board’s passage this month of an austere budget that increased the annual tax bill for homeowners by an average of $450.

“We cannot continue to rely so heavily on our real estate taxes,” Supervisor Dalia Palchik (D-Providence) said after introducing the motion, approved on a 9-1 vote. Residential tax revenue accounts for 66 percent of the county’s general fund after remote working hurt the commercial real estate market, the motion noted.

The idea at this point is an intellectual exercise: Hill was asked to report his findings to the board in September to start what would be a months-long public engagement process before any action is taken.

But it nonetheless conjured the same passions that surrounded voter referendums on meals tax proposals in 1992 and 2016 that were defeated by large margins after both sides waged massive lobbying campaigns. A 2020 Virginia state law allows jurisdictions to impose a meals tax without voter input, which neighboring Prince William County did in 2022, with Republicans on that county board strongly opposed.

“Residents have pretty strongly stated that this isn’t a way that they want to see us go,” said Supervisor Pat Herrity (R-Springfield), the sole “nay” vote, arguing that a meals tax unfairly targets the food industry and would disproportionately affect lower-income residents who can barely afford to eat out.

Several Democrats on the board accused Herrity of misrepresenting the facts.

“The immediate lobbying is already occurring, and we expect that,” said board chairman Jeffrey C. McKay (D). “But can the board have time to get adequate information and data before we start being out there talking about our opinion and all these things related to it? Nowhere in here does it say the board is approving a meals tax. This is a request for information.”

Supervisor James Bierman (D-Dranesville) made a case for a meals tax.

“The counties that surround us, every single one except for Loudoun County, has a meals tax,” he said. “They’ve got a meals tax in Herndon and plenty of people come from Sterling to Herndon to eat their food.”

Both sides agreed that Fairfax County needs more revenue, blaming Gov. Glenn Youngkin (R) and the General Assembly for not allocating more state funds to public schools. A 2023 state report found that Virginia spends $1,900 less per student than the national average, which Fairfax officials say has forced the county to spend an extra $568 million on its schools.

Even so, the fiscal problems in the county of 1.1 million residents run deeper than that.

Record high office vacancies spurred by the pandemic, a need for more affordable housing and demographic changes that have heightened the demand for services, including inside schools, all add to the pressure for more revenue.

“If a meals tax was implemented tomorrow, it would generate way below the $568 million that the state owes us,” McKay said.

correction

An earlier version of this article mischaracterized a quote attributed to Jeff McKay about budget pressures in Fairfax County. The article has been updated to remove the attribution.

ncG1vNJzZmivp6x7uK3SoaCnn6Sku7G70q1lnKedZLGkecydZK%2BZX2d9c4COaWxoamFks6K10Z%2BYsWWTpMKvwNhmpJ6ZnKh6ta3XZqmeq6SWwrOtza2qZp6fpLFw