In 2004, the Town of Ashland voted to raise its meals tax by a penny on the dollar, for a total of 5 percent. Later that year, voters in Hanover County rejected a proposed 4 percent meals tax by a resounding margin, while in New Kent County, the voters adopted a 4 percent meals tax.

That, in a nutshell, presents the arguments both for and against legislation pending in the General Assembly to give counties the same authority as cities and towns to levy a meals tax. Hanover doesn’t have the same power as Ashland (or Richmond, which raised its meals tax a penny by City Council action in 2003) to impose a meals tax without a public referendum. On the other hand, voters have been known to approve meals tax referenda, as New Kent proved in 2004 and little King William County did last year. So, why not leave it up to the people?

Virgil Hazelett has an answer for that question. As county administrator in Henrico County, he helped engineer a referendum in 2005 to issue about $349 million in bonds to build schools and libraries, buy parkland, and construct roads. The voters approved the bonds, but they voted down the meals tax that was proposed to pay for them. As a result, Henrico delayed dozens of projects to spread out the costs an extra year.

This is not a new debate for the General Assembly, but the political environment has changed because of the recession and the great gulf that local governments have to fill in their budgets. Since half of the state general fund represents aid to localities and the state has to cut more than $4 billion from the next two-year budget, there is no relief coming to local governments from that direction. That leaves local real estate taxes, based on property assessments that have been falling, in some cases precipitously, in the economic calamity that began about two years ago. So, some state lawmakers reason that this is a good time to give localities another tool to raise revenue, even though they’re not willing to raise taxes themselves.

To wit, the state Senate approved a bill that would allow counties to levy a meals tax without referendum and remove a 4-percent cap on the rate. The debate may be moot because the measure is heading for what looks like sure death in the House Finance Committee, which already has disposed of a similar proposal this year.

Still, the debate is important even if the outcome is predictable. My story in tomorrow’s print edition of the Times-Dispatch will give you a little more to chew on.

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