The additional tax would raise the price of a $20 meal in Alexandria by 20 cents. A city councilman says it's not a big deal, but restaurant owners are upset.
WASHINGTON — After a contentious meeting Monday night, the Alexandria City Council looks set to approve a 1 percent increase to its meals tax later this week, with the proceeds going to help boost the affordable housing stock in the Virginia city.
Even though dozens of local restaurant owners attended the meeting to push the council to hold off on the increase, the tax will rise from 4 percent to 5 percent. When combined with the state’s 6 percent tax on meals, the 11 percent tax will be one of the highest in the region.
That did not sit well with Margaret Janowsky, who on Tuesday morning was trying to celebrate Del Ray Cafe’s sixth anniversary. She owns the restaurant with her husband.
According to a story in The Washington Post, the increase will raise almost $5 million annually for the city’s affordable housing fund.
Janowsky said she agrees that the city should do something about the lack of affordable housing for nurses, construction workers, public safety officers and her own restaurant workers, but thinks the burden should be shared by everyone who enjoys what Alexandria offers.
The Del Ray Cafe at 205 E. Howell Ave. features eggs Benedict, omelets and French toast for breakfast, along with lobster, mussels, chicken and duck for dinner.
But instead of celebrating her restaurant’s anniversary, Janowsky was still steamed about her exchange Monday night with Alexandria City Councilman Willie F. Bailey.
Bailey said the small increase in the meals tax will not, based on the city’s studies, affect business in Alexandria. Janowsky said collecting the tax will be a burden that’s hard to pass on to customers.
“We can’t just raise our prices every day to cover the increase in costs,” she said. “There’s a price the market can bear. The less we get, the less we can pay the actual people that are supposedly some of the people they’re trying to help, and a lot of those people are the workers in the restaurants.”
Bailey called the city’s budget “bare bones” and said the council is forced to make tough decisions today to fix some of the problems previous councils passed along. But generally, he believes city residents are willing to take the tax increase in stride if it will ultimately help the city.
“A lot of residents are saying, ‘Hey, if I spend $20, that’s 20 extra cents on my meal. I will pay that to be able to make sure folks are able to live in the city that they work in,'” Bailey said.
Janowsky, however, counters that it shouldn’t be up to the restaurants to “to make up for the years of [the council’s] lack of dedication to this issue.”
Bailey suggested that with the meals tax, everyone, including people who don’t live in Alexandria, will be helping to boost the affordable housing fund. For example, he mentioned that bumping up the local real estate taxes would only impact Alexandria businesses and residents.
In fact, he said he believes a meals tax is so fair, he would gladly pay the same kind of tax in other cities he visits if the money were to go to the same type of program.
“We know there’s a housing crunch throughout the United States,” he said.
Along with the local business owners, the Alexandria Chamber of Commerce opposed the one-cent tax increase. Janowsky said part of their concern is that the restaurant owners only discovered the increase was likely to go through late last week.
“The problem is, no one in the city decided it was worth sharing with the restaurants,” Janowsky said. “Quite honestly, we heard about it randomly through a newspaper article a couple months ago when there were several options on the table.”
Bailey, however, said he believes Alexandria did enough to publicize the proposal, beginning in late December.
Like WTOP on Facebook and follow @WTOP on Twitter to engage in conversation about this article and others.