Facing a proposed tax increase they say is unfair and too steep, Richmond restaurant owners on Tuesday sounded off on Mayor Levar Stoney’s plan to fund new construction of city schools.
About three dozen people attended a meeting in Scott’s Addition to strategize how to counter Stoney’s plan and lobby the Richmond City Council to reject it.
“We know that there is a problem with the schools, we know they need to be fixed, and we know restaurants should not be the one bearing the full cost of that burden,” said Frank Brunetto of Rueger Restaurant Group, who is president of the Richmond branch of the Virginia Restaurant, Lodging and Travel Association.
Last week, Stoney proposed increasing the tax by 1.5 percentage points to generate an estimated $9.1 million per year. The new revenue would allow the city to expand its debt capacity and borrow up to $150 million in the next five years to fund school construction and renovations.
If the City Council approves the mayor’s proposal, Richmond’s meals tax would increase from 6 percent to 7.5 percent. Currently, the combined sales and city meals tax is 11.3 percent; the mayor’s proposal would increase that figure to 12.8 percent.
Brunetto’s organization said in a joint news release with the Retail Merchants Association last week that it opposes the proposal, calling it an industry-specific tax that would have a significant effect on poor and working-class families, as well as food service workers who depend on prepared meals.
On Tuesday afternoon, the frustrated restaurant owners said that while they support improving schools, they fear the increase would result in an exodus of patrons to their competitors in the counties, where the taxes are lower.
Some questioned why Stoney is pushing to pin the future of Richmond Public Schools to restaurant receipts instead of spreading the cost across the city’s tax base or cutting City Hall’s budget to help shoulder the costs.
“It should be broad-based,” said Scott Garnett, owner of Lift Coffee Shop and Café on Broad Street. “It shouldn’t just focus on us.”
Carter Snipes, a real estate broker and developer who owns the Hofheimer building in Scott’s Addition, agreed.
“The reality from their perspective is this is the low-hanging fruit,” Snipes said. “It’s not necessarily the best policy. ... We should focus on that.”
The mayor announced the proposal about a month after the Richmond School Board endorsed a $224.8 million plan to replace some of the district’s overcrowded and dilapidated buildings. Stoney’s proposal would leave a $74 million gap in funding for the plan, but School Board leaders have praised it.
As recently as last week, Stoney said he was still considering other financing options to fund school construction, including a cigarette tax. However, the mayor dismissed the idea at a news conference Tuesday in Shockoe Bottom.
A per-pack tax on cigarettes would be unsustainable in the long run and would generate too little revenue, Stoney said.
“I have no plans for further taxes,” Stoney said at the news conference.
He added: “For me, as stated earlier, the $150 million in financing is a base for the School Board to start building schools right away. They can use other tools that will be at their disposal, whether it’s tax credits or performance contracting, things of that nature.”
Stoney convened the news conference outside of a Shockoe Bottom restaurant to push his plan. Flanked by representatives from the 7th District and former state Sen. Henry Marsh, a former Richmond mayor, Stoney reiterated that the school system’s capital needs cannot be deferred any longer.
“We can have students walk into new schools in the fall of 2020 if we act now,” he said. “The future is now. No more delaying. No more waiting. No more punting.”
Where City Council members stand on the mayor’s plan has come into clearer view over the past week.
Three members — 6th District Councilwoman Ellen Robertson, 7th District Councilwoman Cynthia Newbille and 9th District Councilman Michael Jones — support the meals tax increase.
Joining Stoney at the Shockoe Bottom news conference, Newbille stressed urgency.
“Now is the time to ensure that our children have state-of-the-art facilities, that their education is an absolute priority,” Newbille said. “Now, not tomorrow. Now, not next week, not next year — now.”
Four council members either oppose the plan outright or have expressed skepticism that increasing the meals tax is the right approach. They are 1st District Councilman Andreas Addison, 2nd District Councilwoman Kimberly Gray, 5th District Councilman Parker Agelasto and 8th District Councilwoman Reva Trammell.
Two others — Council President Chris Hilbert of the 3rd District and Councilwoman Kristen Larson of the 4th District — have said they are on the fence.
The council is scheduled to weigh the mayor’s proposal at its Organizational Development Standing Committee meeting next Monday at 5 p.m.