New Kent budget proposal moves forward on two-cent hike on meals tax

A public hearing at New Kent Board of Supervisors’ Monday night meeting on the budget yielded comments about a proposed increase of the county’s meals tax from four cents to six cents. And after each board member spoke on the issues, the FY2021-22 budget reflected the increase.

Supervisor elected to maintain the proposal of increasing the meals tax for next year’s budget by a slim 3-2 vote.

County leaders listened as New Kent County Administrator Rodney Hathaway recapped the $80,711,106 budget (originally $79,688,523) for the new fiscal year. Hathaway commented about dialogue he’s engaged with both New Kent Sheriff’s Office and New Kent Fire and Rescue representatives on providing raises. At the April work session, Hathaway revealed that additional revenue may be available to supplement that request.

The county administrator also added that conversations with the school system continue to be ongoing. Currently, the school system is slated to receive $38,406,290 (originally $37,602,203) for the upcoming year, approximately 47 percent of the proposed budget.

The real estate tax rate will remain at 79 cents per $100 of assessed value for the new year, which is no change from the current year.

General revenue for the county is expected to increase by $3,695,824 under the revised proposed budget (originally $2,758,199). Allotment for those funds include cost-of-living raises for employees (four percent), hiring three new positions for the sheriff’s office, three new communication officers, and salary adjustments. Local safety officers will also receive a $5,500 base salary increase based on the new revenue figures provided.

The school set aside fun will be repurposed to operations for the new Quinton Elementary School that is slated to open in Fall 2022. Other revenue allocations include an increase of the meals tax by two-percent.

Capital Improvement Projects (CIP) are recommended at $4,379,130 for next year. Big ticket items include the purchase of six school buses, upgrading four vehicles and purchasing three additional ones for New Kent Sheriff’s Office, and upgrading technological needs.

Hathaway added that the two-cent increase in the meals tax will be specifically set aside to fund future CIP within the county. Among future plans for discussion within the next five years include the construction of a new middle school ($50 million), new county and school administration building ($40 million), four new fire stations ($20 million), elementary school renovations ($15 million), phase two at Pine Fork Park ($6 million), New Kent Historic School renovation ($4.5 million), and a new animal shelter ($4.5 million). In total, new projects total approximately $140 million.

“I believe we need to set aside some money right now,” Hathaway said. “In about five years, some of our debt service will be paid off and I think we will be in a good position.”

District 3 leader Patricia Paige talked about things coming down the pipeline in regards to projects.

“It’s not all doom and gloom, but it’s not all bright and sunny either,” she said. “I see where we have money set aside for projects from the proposed meal tax, but I don’t see why we can’t set aside more than $300,000 [from current fiscal year contingency funds] and apply it to these projects.”

The public utility fund, which is self-sustaining and paid by the users, will operate on a $8,134,874 budget. Sewer and water rates will have a one-percent reduction, and there will be no increase in connection and availability fees. The Bottoms Bridge Service District Tax Rate will see a reduction for a second consecutive year, dropping by two cents from 13 cents to 11 cents.

District 2 representative Tommy Tiller Jr. asked for a five-cent reduction in the district tax rate.

“It’s a possibility that we can get it down to eight cents,” responded Hathaway.

The public utility CIP is slated at a price tag of $3,110,000. Top projects include engineering for solids stabilization and dewatering at the PLW Wastewater Treatment Plant and storage tank replacement at The Colonies.

After Hathaway’s presentation, three people spoke at the public hearing about the meals tax increase.

“While it is two-percentage points, it’s roughly a 50-percent increase [in the tax],” said J.B. Benson during the public hearing. “I propose that we have a referendum in November and let the citizens decide.”

“I’m against the food tax increase,” said David Adams, owner of Adam’s Sports Mart in Providence Forge. “In the last year, businesses have had a tough time collecting them.

“Businesses are the ones who hear from it and deal with it,” he continued. “I would like you to reconsider it. It’s the principle of the thing. Just because you can doesn’t mean you have to.”

Thomas Miller also opposed the increase of the meals tax during the public hearing period.

“If this passes, it will put New Kent at the top in the state,” he said. “If you did a referendum, think about it, will it pass?

“The one industry that is suffering the most in the country is the restaurant industry,” Milled continued. “Approximately 20 percent has closed in the state, and the others can’t hire people. Now, you want to give a 50-percent increase in the meals tax. That’s not right. Not this year.”

District 5 representative John Lockwood responded to the comments made at the podium by the public speakers.

“We talk about helping our citizens and those who have a hard time with a real estate tax,” he said. “Even a portion of the tax will be paid by someone else. If your ticket going out to dinner is $50 and it goes up by two percent, it goes up to $51. I don’t think anybody is going to stiff the waitress over a dollar.

“I see this as an opportunity for additional revenue where our citizens doesn’t have to pay for it,” Lockwood concluded.

“Timing is everything,” District 4 supervisor Ron Stiers said as he countered Lockwood’s monologue. “How would residents feel if we told them the real estate tax would go up by 50 percent?”

“It’s not just the tourists that goes out to eat during the Summer months,” he continued. “I truly believe that the more we have to pay on a tax on a meal, then that’s the less we leave for the waitress as far as a tip. I’m against it back when we had our March retreat and I’m against it now.”

“New Kent County is growing and we have to find some way to support it,” said District 1 representative and chairman Thomas Evelyn. “If this was going back into operating, I would be totally against it.

“We have projects and look what we did with the Colonial Downs money,” he added.

Stiers made a motion to deny the increase from four-percent to six-percent. The motion failed 2-3, with Evelyn, Paige, and Lockwood casting votes to deny. Lockwood followed up with a motion to improve the increase, which passed 3-2 with Stiers and Tiller casting the dissenting votes.

Under the law, county leaders cannot take action on the budget until 10 days have passed after the public hearing. They are expected to vote on the measure at their May 26 work session.