Charlottesville Business Owners Calling for City to Reconsider Raised Tax Rates
CHARLOTTESVILLE, Va. (WVIR) - Several Charlottesville business owners are asking the city to reconsider raising tax rates in the fiscal year 2020 budget.
On Monday night, Interim City Manager Mike Murphy presented the latest draft of the $188.8 million budget to city council.
That draft included increased rates for both lodging and meals taxes.
Hotel and restaurant owners said their businesses took a major hit after the events of August 2017 and they are still struggling to overcome.
Now they said the city needs to be promoting tourism, not adding more taxes and deterring people from coming to the city.
“If I raise the meals tax, I’m automatically charging my customers more and you’re forcing me raise our prices on our menu,” said Peter Castiglione, owner of Maya restaurant off of West Main Street.
Charlottesville business owners are pleading with city councilors to not raise the city’s meals and lodging taxes.
“It doesn't seem like the best time to tax tourism,” said Susan Payne, who opposes the tax increase.
The current draft of the $188.8 million fiscal year 2020 budget calls for a 1 percent raise of both meals and lodging taxes from 5 to 6 percent and 7 to 8 percent respectively.
City staff said that money would be used in part to fund affordable housing efforts.
Joan Fenton, of the Downtown Business Association, said, “For many of us in the business community, we are all in support of all the efforts that you’re making in housing and equity and all those issues but we feel the city has better ways of getting income.”
Restaurant and hotel owners said they are still recovering from the major hit they took in the wake of the violent events of August 2017 and claim tax hikes will only make that worse.
“We took a beating in '17, and in 2018 we saw no growth, and even if the 2019 meals tax collections are going up and we're seeing higher revenues, we borrowed money just to make it through 2018, we're still paying off debt that's left over from what happened in 2017,” noted Castiglione.
Murphy said the city could increase the real estate tax up to 2 percent, but that the current budget draft prioritizes the meals and lodging taxes because those costs are more likely passed on to people from out of town and not people who live in Charlottesville.
“35 percent of meals tax is paid by people aren’t our local residents and so unlike the real estate tax it was less burden locally.”
City council is set to host several work sessions as it works toward its goal of adopting a final budget on April 8.
The first work session will be on Thursday night at 8 p.m. at City Space.
A public hearing on the proposed tax increases is set for March 18.