January 24, 2007

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Meals tax bill amended to apply to all cities

Call today and Thursday by 11 a.m. in opposition to HB 2315

Bill on House floor for final passage Thursday, Jan. 25

A substitute adopted to HB 2315 (Welch) today makes referendum requirements for raising or enacting meals taxes applicable to ALL CITIES. The floor substitute prohibits cities from raising or levying any meals tax that results in a tax rate greater than 5.5 percent, unless the increase is first approved in a referendum. The referendum can be called for by a citizens' petition or by a resolution of the council. If by resolution, the resolution has to state the projects or purposes for which the revenues are to be used, and the referendum has to include that information as well.

Please contact your member of the House of Delegates in opposition to this bill.

Here are some talking points:

* Voters already have the most effective "referendum" of all - the chance to vote out city council members if they are displeased with their management of the city.

* This measure effectively caps the meals tax in these cities and puts additional pressure on the real estate tax. Meals taxes help offset the real estate tax rate.

* Local elected officials are perfectly capable of setting and voting on local tax rates. To that end, local leaders are ready, willing and able to take the political heat for doing so.

* Cities make substantial contributions to public education beyond the minimum required by the state because they want their schools to attain or retain accredited status. Revenue caps inevitably will have an effect on these cities' abilities to fund local services, including education and public safety.

* While the bill may only apply to cities at this point, make no mistake: it obviously creates a substantial precedent that inevitably would lead to calls for extension of the revenue requirement to towns as well.

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