THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Monday, November 7, 1994 TAG: 9411070056
SECTION: LOCAL PAGE: B01 EDITION: VIRGINIA
SOURCE: BY KAREN JOLLY DAVIS, STAFF WRITER
DATELINE: EASTVILLE LENGTH: Medium: 100 lines
Northampton's leaders are convinced they have a solution to county revenue problems. Rather than shift taxes from one overburdened part of the community to the other, they want tourists to shoulder some of the weight through a meals and beverage tax.
``The answer is to capture outside dollars for local use,'' said County Administrator Tom Harris.
On Tuesday, Northampton residents will vote on the tax.
There's certainly been enough opposition to the meals tax. The Chamber of Commerce is against it, for one, but proponents say it's the only new revenue tool that could help reduce existing taxes.
Officials estimate that a 4 percent tax on prepared foods could bring $300,000 or more into county coffers every year. Up to half of that, they think, could come from nonresidents.
Tax increases in Northampton, the state's poorest county, have farmers complaining they will be driven from their land, and businessmen saying their shops will close.
Since 1985, the county budget has doubled to about $20 million while the population has dwindled. Its biggest industries - produce and seafood-processing plants - have closed. Personal property tax rates have steadily risen, from $2.56 per hundred dollars in 1985 to $4.30 per hundred dollars now.
After a controversial reassessment, taxes on waterfront property skyrocketed. The only bright spot on the economic horizon is the maximum-security prison planned for the Cape Charles area, and the 18 million a year it would spend on operations.
``We have to make it so that the taxation in Northampton County is not overtly hostile to the farmer or the businessman,'' said Tom Dixon, chairman of the Board of Supervisors. ``The board is proposing the meals tax so that other local taxes can be reduced.''
There aren't many revenue sources that the county hasn't already tapped. Northampton could institute business license taxes and levies on daily rentals like videos and ``rent to own,'' but neither fit the bill.
There is such a low volume in daily rentals that this type of tax wouldn't generate enough income to offset the cost of administering it, said Commissioner of Revenue Anne Sayers.
On the other hand, business license taxes could bring in significant revenue, and don't need a referendum to be established, but they are strongly opposed by county residents. ``We're opposed to it because we want to attract business,'' said Sayers.
There's another advantage to meals taxes, say county officials. They're optional.
``It's a tax of choice,'' said Sayers. ``If you don't eat out, you don't pay the tax. You go other places and pay their tax without even thinking about it.''
The idea that locals might choose to eat at home rather than pay a 4 percent tax does not sit well with local restaurateurs.
``This is an unnecessary tax with no purpose and objective,'' said Bill Downing, president of the Eastern Shore chapter of the Virginia Hospitality and Travel Association. ``We're trying to inform the voters in Northampton County that this is not a restaurant tax. This is an additional sales tax on them.''
The Eastern Shore Chamber of Commerce announced last week that it opposes the meals and beverage tax.
In an Eastern Shore News article, chamber president Joyce Holland said the chamber's board of directors ``does not feel that such a tax is in the best interest of the business community.''
Holland said the board voted unanimously to ``encourage the county to find other ways to increase its tax base,'' calling the meals tax a deterrent to tourists and residents who might want to eat in Northampton County.
Tom Dixon fears the issue is becoming clouded by rhetoric.
``Enter emotion, exit logic,'' said Dixon about the opposition. ``When it gets down to it, that's the way too many things get done around here. Things become emotional.''
Harris, the county administrator, said the meals tax is only part of a larger plan to stabilize and increase the tax base. First, county spending must be controlled. Harris said Northampton cut its locally funded operating budget by 6 percent last year and did not raise taxes while increasing local dollars to the school system by 10 percent.
Next, the county must work toward expanding tourism and filling the proposed ``green'' industrial park on the Cape Charles harbor, he said.
``It's a matter of implementation,'' said Harris. ``We planned our strategy. We're working our strategy. Our strategy is working. Now it's time to do the next phase of implementation.''
Harris challenged taxpayers to focus on the long-term effects of Northampton's sustainable development efforts, the county's way of stabilizing and expanding the tax base without destroying the environment. The board has not said what taxes might be decrease if this new tax is approved.
``Hold us accountable for it,'' he said. ``Ask, is it working?'' ILLUSTRATION: Color staff map
Northampton County
For copy of map, see microfilm
KEYWORDS: MEALS TAX
by CNB