VIRGINIA BEACH, Va. (WAVY) — Financial relief is on the way in Virginia Beach, especially for those who like to support local restaurants.
Tuesday evening, City Council voted 9-2 in a virtual meeting to eliminate the city’s meal tax for the months of May and June in an effort to ease the burden caused by the coronavirus pandemic.
Council members Louis Jones (Bayside) and Barbara Henley (Princess Anne) voted against the measure.
Going into the meeting, the proposal brought by Mayor Bobby Dyer and Vice Mayor Jim Wood (Lynnhaven) eliminated the tax for all of July as well. However, Councilwoman Rosemary Wilson moved to eliminate the third month.
“I think the three-month period is too long,” Wilson said. “In June we can reevaluate how well it is working and then see if we want to extend it to July.”
Currently, those going out to eat in the resort city pay a meals tax that is 5.5 percent of the total bill.
The theory behind suspending the meals tax is that it will help restaurants and those who support them.
However, eliminating the meals tax will also take a bite out of the city budget.
City financial staff estimated three months without the meals tax would equate to $4.4 million in lost revenue. The Department of Human Services, Police Department and Public Works Department would all see their budgets shrink by roughly $784,000. Virginia Beach Public Schools would also be asked to plan for a $1.2-million dollar cut.
“I personally don’t believe foregoing this tax will have any impact at all whether somebody goes out and buys take-out food from a restaurant,” Jones said in his reasons for voting against it. “I am concerned a preemptive act like this… could damage the financial standing in the eyes of … the people we sell bonds to.”
The city’s financial adviser did discourage the city from eliminating the meals tax, Alice Kelly, the Virginia Beach Finance Director, said earlier in the meeting.
Council also voted to waive late fees and interest for 60 days on meals taxes, as well as admissions and transient occupancy taxes for April, May and June.
The late fees and interest will also be waived on personal property taxes and real estate taxes until August 1st.
On Friday, city management will release an updated 2021 budget proposal that takes the pandemic and its impacts into account.
A third ordinance approved Tuesday allows the Virginia Beach City Council to hold public budget hearings online during the COVID-19 pandemic. Public comments on the budget would be solicited electronically in advance of the public hearings on the budget, according to the proposed ordinance.
“We are in a journey together that we must make together,” Dyer said at the end of the meeting. “And remember we are one day closer to having this situation over than we were yesterday.”
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