James City supervisors have mixed feelings on sales tax bill

jojacobs@vagazette.com

James City supervisors have mixed feelings about a bill that would increase the sales tax rate in Historic Triangle localities, though some of their counterparts in Williamsburg and York appear receptive to the idea.

Sponsored by Sen. Thomas “Tommy” K. Norment, R-James City, Senate Bill 942 would increase the sales tax in Williamsburg, James City and York with an eye toward generating income for the tourism industry. Half of the generated revenue would go to the Williamsburg Area Destination Marketing Committee to attract overnight tourists to the region. The other half would be split among the localities based on where the money was collected.

James City supervisors agreed the bill may boost the region’s tourism, but they stopped short of heaping praise on the idea, citing concerns with how the tax will affect local residents. Some supervisors also criticized the lack of community input on the bill as it cleared the Senate in Richmond.

“I’m concerned citizens would carry the tax burden instead of tourists,” Supervisor Sue Sadler said.

“It substitutes a tax on tourism for a tax on everybody,” said Supervisor Jim Icenhour, adding he’d like some sort of assurance the effort would be a good return on investment.

Board of Supervisors Chairman Ruth Larson felt confident the tax would be borne by resident and tourist alike, but the local allocation could make that worthwhile.

“We’re all going to have to pay a piece of it,” Larson said, adding the local allocation could find use in community development.

Should the bill pass, Williamsburg would have to repeal its ordinances raising food and beverage tax, admission tax and local transient occupancy ordinances, which are elements of the Tourism Development Fund, to allow Norment’s bill to take effect.

The bill would also repeal the power of Williamsburg, James City and York to impose the $2 transient occupancy tax, which is used to promote tourism.

Icenhour also voiced concern about how the bill has moved through the General Assembly with what he considered little public input.

“This didn’t see a lot of the light of day,” Icenhour said.

But still, the local allocation side of the bill could be a godsend to the county’s budget, opening a new revenue stream to help fund a variety of potential capital projects and expenses, Icenhour said.

The bill’s impact statement anticipates the 1 percent sales tax surcharge would generate $20.7 million in 2019. The following year, the increase would generate $23.1 million. If passed, sales tax in James City, Williamsburg and York would increase from 6 percent to 7 percent on most items, except food intended for human consumption.

As proposed, the bill appears to be a new way to tackle an old problem: How to effectively market the region’s tourism industry. Current schemes to market tourism haven’t been effective and something needs to be done to energize that effort, Icenhour said.

“There are pros and cons,” he said.

Supervisor John McGlennon also expressed a cautious optimism about the bill. The county could use an income boost to provide services to residents.

“I’d like to know the implications,” he said, adding he had concerns about the split between residents and tourists when it comes to footing the tax. McGlennon is a professor of government and public policy at the College of William and Mary.

Supervisor Michael Hipple didn’t respond to multiple requests for comment.

Elsewhere in the Historic Triangle, other elected officials are more excited about the idea.

York Board of Supervisors Chairwoman Sheila Noll voiced support for Norment’s bill, particularly its allocation to localities.

“We’ve been looking for an alternative source of revenue besides the real estate tax,” Noll said.

Noll said tourists, not local residents, would be the ones to shoulder the tax. The money allocated to York through the fund could be used to cover expenses in education or public safety.

“It’ll provide a modest revenue boost,” Noll said, referring to what the fund sets aside for the localities.

Williamsburg Vice Mayor Scott Foster and City Councilman Benny Zhang said they would vote to repeal the Tourism Development Fund taxes.

“I think the council as a whole is supportive of the senator’s efforts,” Zhang said.

“It provides a much-needed overhaul of our tourism marketing revenue stream and also provides the localities with funds for tourism infrastructure and other local revenue needs,” Foster said.

Ultimately, the bill still has to clear the General Assembly and be signed into law, meaning there could be changes to the proposal.

“I’m taking a wait-and-see approach,” Larson said.

Should the House of Delegates pass the bill, the James City County Board of Supervisors will be in a better position to study it more closely, Sadler said.

The Senate passed the bill with a 27-10 vote on Feb. 13. Norment and Sen. Monty Mason, D-Williamsburg, voted in favor of the bill. Now the bill has to pass the House of Delegates and then get the governor’s signature.

Staff writer Jimmy LaRoue contributed to this report.

Jacobs can be reached by phone at 757-298-6007.

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