Anonymous wrote:
I would rather this also, mostly because we never eat out. How do they even enact a meals tax? Is there a vote?

The fact that a meals tax is based on discretionary spending (food away from home expenditures) rather than basic living costs (housing) is a benefit of a meals tax. No one has yet to show that aggregate spending on food away from home expenditures would be significantly depressed with a meals tax. There’s not a lot of reason to believe it would be given that other Northern Virginia jurisdictions, even with a meals tax, show strong growth in food away from home expenditures and given that Fairfax County has a lot of well-off households (about 34% have incomes greater than $200k). But individual households, if they do feel the impact of that additional 1-6%, have the option of preparing more meals at home to mitigate the impact. Households could also go to Loudoun County, the one other hold out in Northern Virginia. But given transportation costs, it seems unlikely many would make the trip, unless they were doing it out of spite for Fairfax County adopting a meals tax. And I wouldn’t be surprised if Loudoun eventually adopts a meals tax as well.

The Fairfax County Board of Supervisors might only begin to consider officially a Meals Tax after the County Executive delivers his September report on tax diversification options, including a Meals Tax of 1-6%. After the report is considered, the Board of Supervisors would still need to vote on whether to adopt a Meals Tax, what the rate would be, and other important matters like how much (if anything) restaurants would get to retain from the meals tax revenues collected for the service of holding such revenues in trust for Fairfax County and when the Meals Tax would go into effect (time would be needed for both the County and the restaurants to work out the logistics). A simple majority is all that would be needed for a Meals Tax to be adopted.

Anonymous wrote:No one wants more taxes in either form.

The question of how revenues are raised is separate from the question of how much revenue is raised.

I pulled up budgets from several Northern Virginia jurisdictions to find out how much the real estate tax assessments and food away from expenditures had grown, on average, what the standard deviations were, and what the correlations were between growth in real estate assessments and food away from home expenditures. I also pulled in current Fairfax County real estate assessments and restaurant sales figures. And the Fairfax County base real estate tax rate and current real estate tax revenues.

Based on these numbers, I was able to ascertain approximately what the base real estate tax rate should be, given an adopted meals tax, to secure the same revenues Fairfax County gets today (i.e., what real estate tax rates would make adoption of various meals tax rates revenue neutral). I also ascertained what the expected growth in the tax base (i.e., real estate assessments and/or food away from home expenditures) and expected standard deviation of such growth would be for various meals tax rates. The analysis was similar to the kind of analysis one might do to build a portfolio of stocks and bonds, where one is trying to optimize growth given one’s risk tolerance (while avoiding an inefficient allocation that would allow for more expected growth with lower risk).

This analysis showed that the status quo (meals tax 0%, base real estate tax rate 1.125) is as inefficient as possible. Even the highest meals tax rate of 6% (with a base real estate tax rate of only 1.07) provides a higher expected return and lower expected standard deviation than the status quo.

The results shouldn’t be all that surprising. In Northern Virginia, growth in food away from home expenditures are more than growth in real estate assessments by about a full percentage point. The standard deviation of food away from home expenditures is higher than the standard deviation of real estate assessments. But the growth rates are really poorly correlated, so relying on the combination of real estate taxes and meals taxes results in a lower expected standard deviation than relying on real estate taxes alone.

I have no idea if the Board of Supervisors will adopt a meals tax in a revenue neutral manner (or at all), or if the Board of Supervisors will use at least some meals tax revenues to help fund priorities that might otherwise go unfunded.

I will say, however, that I have not seen anyone lobbying effectively for a revenue neutral (or revenue negative) meals tax adoption. Instead, meals tax opponents have basically said they are opposed to a meals tax and are unwilling to support it under any circumstances. So supervisors who might be inclined to raise revenues in a manner that is less expensive for Fairfax County residents (especially for those living in lower-income households) really have no incentive to try to find a compromise position with meals tax opponents. That’s just a real risk that comes with trying to negotiate based on hard positions, not interests. https://www.amazon.com/Getting-Yes-Negotiating-Agreement-Without/dp/0143118757

Anonymous wrote:

Anonymous wrote:


There’s no vote from residents required to enact a meals tax.

No vote? What country sorry county is this?

Of course there is a vote! It’s just a vote by elected representatives (the supervisors) of Fairfax County rather than a county-wide referendum.

For decades, the Commonwealth of Virginia required counties (but not cities and towns) to have a referendum before they could adopt a meals tax. What happened is that cities and towns almost universally adopted a meals tax to diversify their tax revenues, as did a significant percentage of counties. The exception to this were the largest counties (like Fairfax County) where successfully persuading a majority of hundreds of thousands of voters was nearly impossible. Even something as simple as getting volunteers to talk to voters at precincts is a LOT harder when you are talking about hundreds of precincts, not just a handful (especially on something as wonky and esoteric as tax diversification).

In the dueling 2016 campaigns, meals tax opponents outspent meals tax proponents 2:1. Meals tax opponents also threw arguments and claims at voters like spaghetti at the wall. https://www.washingtonpost.com/opinions/what-fairfax-county-voters-really-think-about-taxes-and-spending/2018/03/01/30aa7106-1bda-11e8-98f5-ceecfa8741b6_story.html Thus, it wasn’t too surprising when the referendum failed.

The Board of Supervisors was tired of governing a county that was crumbling and that was losing its ability to attract and retain quality employees with reasonably competitive salaries. So they made the made the difficult decision of raising the real estate taxes, costing everyone in Fairfax County more than if the meals tax had been authorized and revenues had been raised through a meals tax instead. Lower-income households, who pay twice as much to raise revenues through real estate taxes as through a meals tax, have paid hundreds of dollars more over the years than they would have if the meals tax had been adopted in 2016, and have arguably been hit hardest. https://youtu.be/Z2rFVntHw44

After that, the Commonwealth finally decided to give county leaders the same authority long held by city and town leaders to decide whether a meals tax makes sense.

Some now seem to argue that the past two meals tax referendums—the last one about eight years old now—should somehow be binding, or that that the county should hold a referendum even though it does not legally have to.

Personally, I find such arguments unconvincing, as I noted in an article published in the Gazette Leader: https://www.gazetteleader.com/fairfax/opinion/letter-fairfax-supervisors-should-make-call-on-meals-tax-9071543 After all, supervisors put their political careers on the line whenever they make decisions. If the Board of Supervisors chooses to adopt a meals tax, and a critical mass of Fairfax County voters are unhappy with raising revenues while paying less than they would through real estate taxes, then the voters can vote for new supervisors who will repeal the meals tax.