Fluvanna Supervisors signal interest in pursuit of meals tax

Localities in Virginia have several options to bring in revenue to support government functions such as an increasing need to pay for the cost of fire and rescue service. At their first meeting of 2025, the Fluvanna Board of Supervisors had a briefing on the potential of one tax that is now easier for counties to levy.

“Local taxing authority was passed by the General Assembly that allows counties to now implement a meals tax without a referendum, effective July 1, 2020,” said Fluvanna County Administrator Eric Dahl.

However, Fluvanna County had to wait a few years because a referendum in 2018 to levy a meals tax was rejected by voters with an overwhelming majority.

Dahl said conservative estimates have calculated Fluvanna could bring in between $300,000 and $600,000 a year, the equivalent of one to two cents of real estate tax revenue. The rate could be as high as six percent of the total bill.

Albemarle County charges six percent and brought in $16.82 million in revenue in 2023. Charlottesville is a city that does not have a cap on the meals tax rate and brought in $18.63 million in revenue in 2023 based on a seven percent rate. Greene, Louisa, and Nelson counties all have a four percent rate and brought in significantly less revenue in the million dollar range.

Dahl acknowledged there is not a lot of restaurant activity in Fluvanna as the county lacks a commercial strip like U.S. 29 in Greene County or the commercial activity at Zion Crossroads. During the discussion Supervisors talked about the potential the new Wawa would have on bringing in revenue.

One member of the Board was concerned about over-taxing residents.

“The reality is let’s say with the exception of Wawa, the huge mass of the people that are taxed to this are going to be the citizens of Fluvanna,” said Supervisor Christoper Fairchild, adding it was not likely the board would offset the cost by lowering another tax.

Another Supervisor said consideration of the tax would be another way of diversifying the revenue available to Fluvanna, potentially allowing a decrease in one of them.

“You’re putting more tools in your toolbox that you can use to work your tax rate out,” said Supervisor Mike Sheridan. “When you only have two tax levers to pull if you need to increase or decrease, it’s on one of those two, isn’t it better to have three or four? And personal property and real estate, 100 percent tax Fluvanna citizens. This one will potentially tax people who are not Fluvanna citizens.”

The discussion touched upon a philosophical argument that is so common in American democracy. What are the point of taxes, and who should pay them? Does government just increase revenue for the sake of it, or are there needs to be covered?

Supervisor Tony O’Brien said whatever money is generated will go to pay for core services.

“You’re going to spend it if you’re going to meet the needs of the county to deliver the core services,” O’Brien said. “The question is, who’s participating in raising those revenues? At the end of the day, I would rather see a portion of that revenue being raised by people aren’t from the county, and I’d rather see a portion of that being raised by people that maybe are in the county but don’t share the tax burden that the homeowner shares.”

Supervisors were told that they could craft an ordinance to direct revenues to a specific purpose such as school construction. A public hearing would be required, but not a referendum. The board wanted more information on who might actually pay the tax and how much would it cost to administer. Commissioner of Revenue Andrew Sheridan said he would at least a year of preparation time.

Dahl said an ordinance is already drafted should the Board want to proceed. There were at least three nods in support of moving forward and the item will return in February.

Before you go: This article was originally sent out as part of the Charlottesville Community Engagement newsletter in the January 14, 2025 edition. Both are functions of Town Crier Productions. You can support the work by purchasing a paid subscription or contributing monthly through Patreon. You can also send in a check or send an email, but drop me a line first.