County supervisors voiced their concerns about the new sales tax with the bill's patron at their work session Tuesday.
A sales tax bill awaiting Gov. Ralph Northam’s signature would raise the sales tax in Williamsburg, James City and York counties by 1 percent to support tourism marketing efforts. Half the revenue would be allocated to the Greater Williamsburg Chamber & Tourism Alliance to market the region to overnight tourists, while the other half would go to localities based on where the sales tax was collected.
The sales tax hike would generate $24.5 million in fiscal year 2019, according to the bill’s financial impact statement.
“I’m trying to restructure, if you will,” said Sen. Thomas K. “Tommy” Norment, who introduced the bill in the Senate. “We really need to do something.”
Norment discussed the legislation with supervisors in an hour-long conversation, stressing what he considered the need for additional investment in tourism and addressing supervisors’ concerns with the bill.
With tourism a leading industry for the Historic Triangle, an effective regional marketing push to bring in more visitors and their money is critical to the local economy. The revenue generated by the bill could help the Historic Triangle introduce itself to new markets, such as in the Carolinas, Norment said.
While acknowledging the value of tourism to the local economy, Supervisor John McGlennon questioned why groceries would be subject to the sales tax bill.
“Why wouldn’t it have been possible to leave that out?” McGlennon said. “From a public policy perspective, it’s a real concern.”
“There’s a lot of angst about that,” Supervisor Ruth Larson said.
Throughout the meetings with officials from the Historic Triangle localities and tourism entities regarding the bill, no one raised concerns about groceries being taxed, Norment said.
“Nobody at that table said ‘don’t do this,’ ” Norment said.
Food intended for human consumption, such as groceries and restaurant meals, would be subject to the tax as per the version of the bill passed by the General Assembly. A previous version of the bill exempted food for human consumption.
McGlennon also voiced concern about the lack of openness during the process when the bill was being discussed, specifically a lack of communication within the county government about the bill.
“I do think we had a different kind of situation than the other two regional communities did,” McGlennon said.
Previous efforts to market tourism appear to have been ineffective, Supervisor Jim Icenhour said, prompting him to question how this new attempt would be able to track its success.
The bill would require annual reports be delivered to the administrations of Williamsburg, James City and York. The chairmen of the House Committees on Finance and Appropriations and the Senate Committee on Finance would get copies as well, said Norment, who is a co-chairman of the Senate Finance Committee.
And while some aspects of tourism’s economic impact can be difficult to track, others, such as hotel stays, are easier to track, he said.
The bill passed both the Senate and House of Delegates with mixed local support — Norment and Sen. Monty Mason (D-Williamsburg) voted in favor of the legislation, while Dels. Brenda Pogge (R-Norge) and Mike Mullin (D-Newport News) voted against it.
Should the governor sign the bill, Williamsburg would have to repeal tax increases related to its Tourism Development Fund to put the bill into effect. The city, James City and York would lose the ability to collect the $2 transient occupancy tax currently used by the alliance’s Williamsburg Area Destination Marketing Committee to market tourism.
If the bill is enacted, it would expire if any Historic Triangle locality enacted new food and beverage, admissions or transient occupancy taxes before Jan. 1, 2026.
“I do think we need to give it a multi-year run to see if it works. And if it doesn’t work, I’ll get rid of it,” Norment said.
Jacobs can be reached by phone at 757-298-6007.