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Stoney greets students after City Council votes to increase meals tax

RICHMOND, Va. -- Mayor Levar Stoney and other Richmond educators were all smiles just hours after City Council voted to increase the meals tax from 6 to 7.5-percent.

Richmond City Council passed the tax by a vote of 7-2 after a five hours-long Monday night session. Mayor Stoney introdcued the increase in order to fund the renovation and replacement of crumbling Richmond school facilities.

On Tuesday, Stoney, 5th-district representative and School Board Vice Chair Patrick Sapini, along with 7th school district Representative Cheryl Burke, greeted students getting off school buses at George Mason Elementary.

"Far too long our kids were allowed to walk in the schools that are long neglected and we did something about it," Stoney said. "[Monday's vote] was probably the most consequential vote on public education we've had in the city in a number of decades."

The increase takes effect July 1, 2018. The total tax paid by diners, once combined with state sales tax,  will increase from 11.3 to 12.8 percent.

The meals tax increase will generate $9.1 million in new funding per year. With that added tax revenue, Richmond could expand its debt capacity to borrow up to $150 million to fund new school construction over the next five years.

George Mason Elementary, located in the city's East End, is one of five schools slated to be replaced with the funds generated from the tax. The building that houses George Mason's students and staff is about 100 years old.

"You can just imagine in about two and a half years from now, roughly, these kids will be walking through doors of a new facility," Stoney said. "To me that's a good government at work."

The other schools to be replaced include E.S.H. Greene Elementary, Elkhardt-Thompson Middle, George Wythe High, and Woodville Elementary.

Without the tax, the city has approximately $66 million of debt capacity through 2023.

The proposed school facility plan, passed by the Richmond School Board, comes with a $224.8 million price tag.

"What we are going to do immediately is get together with the superintendent and leadership of the school board and start charting out what the next steps are," Stoney said regarding his Education Compact Team.

Restaurant owners "exploring all options" 

Jake Crocker, an avid opponent of the tax increase and organizer of the Richmond Restaurant Association, explained he's not giving up his fight just yet.

"We're exploring all of our options," Crocker said in front of his restaurant, F.W. Sullivan's on West Main Street. "We have some consultants that we are working with. Like I said, the pace of this thing was very rapid."

Crocker, and about a dozen of other opponents, attended the two meetings and public hearings where the tax increase was discussed.

"It's tough. We're the ones singled out once again to carry the load," he argued.

Evin Dogu, who owns Sub Rosa Bakery on North 25th Street, worried the tax increase would deter customers away from her small business.

A customer purchasing one of Dogu's morning buns that retail for $4 ultimately will cost $4.51.

"The customers that are coming in may have a little bit of a sticker shock when they hear the total price," she said. "I know that tax is already a high percentage, so it's kind of hard to swallow for a business owner that sells $3 to $5 items."

Karen Stephens, a realtor who drove to Sub Rosa from Henrico County, said the meals tax won't keep her from eating in Richmond.

"I think these taxes will go to a good purpose," Stephen said. "I just hope it keeps going to the schools."

The funds from the meals tax will be exclusive for Richmond Public Schools and be placed in a special reserve, only available to fund school facilities.

City Council President Chris Hilbert signed a document stating Richmond City Council can put forth legislation to immediately repeal the tax increase if it is discovered that any of the funds allocated to the schools are being misappropriated.

But restaurant owners and managers were skeptical and fearful.

"The meals tax has been used before to raise funds that have not gone to the project for which they were intended. The 2003 hike was one such example," said Shannon Conway, director of operations at the Rueger Restaurant Group.

"The Richmond restaurants, independently-owned restaurants, are already contributing exclusively $33 million in additional taxes that are not levied on any other industry," said Crocker.

But several proponents Monday night argued that Richmond schools are in dire need.

"There's leaking sealant, no heat, mouse droppings, no doors on restroom stalls, rolls of lights out, mold on the walls and ceilings are just a few of the problems that children should not have to deal with when they enter a school building," said Mary Gresham, a Richmond parent and public school teacher.

Newly-appointed Richmond School Superintendent Jason Kamras, who plans to send his own two sons to Richmond Public Schools in the fall, said if the school system is to carry out a $224 million plan to renovate and build new schools, sacrifices must be made.

"There are too many buildings that don't say to the kids in those buildings that the adults of this city truly love them because if they did, we wouldn't be sending them to schools that look the way they do," said Kamras.

Richmond City Councilwomen Kim Gray and Kristen Larson, both former members of the school board, cast the no votes.

Larson had previously said that she wanted to defer voting for at least two weeks. During that time, she wanted Richmond City Council to consider adding a sunset clause, allowing the increase to expire after five years.

THE MEALS TAX, 15 YEARS AGO