Council signs off on FY2019 budget, sets stage to approve meals tax increase

Council signs off on FY2019 budget, sets stage to approve meals tax increase

By Alexa Epitropoulos |

City council voted on May 3 to endorse a $748.4 million operating budget for Fiscal Year 2019 and tentatively approved increasing the local restaurant meals tax from four to five percent.

Council’s approved budget is $6.1 million more than the $742.3 million operating budget proposed by City Manager Mark Jinks in late February. Since then, controversy has erupted over public safety salaries and the restaurant meals tax proposed by Councilor Willie Bailey, which will, if approved, go into the city’s affordable housing fund.

After a contentious budget public hearing in March, where members of the Alexandria Police Department, Alexandria Fire Department and the Alexandria Sheriff’s Office decried their pay and benefits in comparison to other localities in the region, Jinks more than doubled the proposed $1.5 million in funding earmarked for retaining public safety officers
to $3.6 million. It’s not clear how that funding will be used as of yet, but Jinks said he will come forward with recommendations in the fall.

The proposed meals tax increase, tentatively approved at the May 3 meeting
and set for a final vote at Saturday’s public hearing, was an eleventh-hour sticking point for council. Though all city councilors were in favor of increasing the meals tax, only four supported it as dedicated funding for affordable housing.

While council approved the budget unanimously, the tax increase was approved 4-3, with Vice Mayor Justin Wilson and Councilors Paul Smedberg and Tim Lovain dissenting.

Mayor Allison Silberberg, while voting in favor of the meals tax increase, said she hoped to find a way to discontinue the restaurant meals tax increase during the next budget process and find another way to generate $4.75 million.

“I think together we’re going to make a difference with regard to affordable housing and we do hear the concerns of the business community, and the restaurant community in particular,” Silberberg said. “… It’s a top priority in our city, but I do think it’s something we need to talk about in the future in regard to small business concerns. I hope that we say ‘This is a top priority – we should find it in the budget and spread it out.’

That’s my personal hope.” This sparked some heated back-and-forth discussion between Silberberg and Lovain.

“It sounds like you’re suggesting in the next fall budget guidance, you’d like to see us retain the dedicated funds that we’ve just approved and keep the dedicated funds in the real estate tax, but provide an additional $4.75 million,” Lovain said.

“I was asking us to push forward with regard to putting it in the budget guidance and finding it in the budget,” Silberberg replied. “If, in the future, we can find it in the budget, we wouldn’t need the meals tax, would we?”

“That’s not a year-to-year thing,” Lovain said in response.

“If we can find it in the budget and it’s solid … then I think it can be revisited at some point,” Silberberg said. “All I want is $4.75 million dedicated to the affordable housing fund and a lot of us have said that.”

“If we want to be flexible about the meals tax, we shouldn’t have dedicated it by ordinance,” Lovain said.

Silberberg and Lovain, ultimately, disagreed, with Lovain reiterating his concerns about dedicated funding and Silberberg saying the dedicated funding for affordable housing sent a signal about Alexandria’s values.

“On the dais here, we’ve heard unanimous concern on affordable housing and the need to invest in increased resources, so to say that if we don’t have dedicated funding then affordable housing is going to get thrown off the ship, I think, is not warranted by the evidence of this council’s commitment to affordable housing,” Lovain said.

“One of the arguments is it must be predictable and consistent, and I agree with that,” Silberberg said.

Following Lovain and Silberberg’s sparring, councilors reflected on the budget process and expressed gratitude to city staff.

“I think we’ve done a heck of a good budget, if I may say so, in terms of addressing affordable housing,” Councilor Del Pepper said. “Maybe it wasn’t the best way, but it was the way we could achieve this very important goal. I think we have come a way, way long way with the schools and also with the city’s infrastructure.”

Councilor John Chapman expressed support for the city introducing paid parental leave for city employees in the FY19 budget, expanding the minimum wage for city employees to $15 and starting down the path of implementing the recommendations of the joint city-schools task force. He also spoke in favor of council’s action on affordable housing.
“I have, for a long time, felt that our city needs to have a strong understanding and structure around what we can accomplish for affordable housing – not just the planning piece, but the funding piece,” Chapman said. “Ensuring that funding piece is here as we bring additional funding partners to the table. … We’re blessed by a community that’s interested in ensuring future generations of Alexandrians have the opportunity to live in this city.”

Wilson praised the FY19 budget process and said the budget made great strides with schools and WMATA funding.

“It was certainly, up until the very end, a tranquil budget process and I would suggest that a big part of that is brought to you by the tough decisions we made last year in this budget process, the tough decisions the joint task force made in advising us the best way to carve out a new path for infrastructure investment,” Wilson said. “We should be proud of that – that’s a lot of hard work and difficult votes, but it put us in a place that really is going to give us a city infrastructure that we can be proud of long in the future.”

Wilson said the city faces a tough FY20 budget ahead.

“I usually like to make things easier next year for ourselves. I think, in some ways we did, in some ways we didn’t. Mark’s got a tough job starting next year. I think we certainly will have our work cut out for us next year,” Wilson said. “We had some strong disagreements about the best way to come up with resources for affordable housing. I think there is a shared consensus that we need additional resources for affordable housing. Aside from the method, which I have objections to, as we noted earlier, I think this is an accomplishment.”

Smedberg echoed Wilson’s concerns about the FY20 budget.

“This budget did manage transit and school capacity pretty well, but those issues are not going away,” Smedberg said. “Transit will be back, transportation will be back. We also will be facing state and federal funding reductions and in a lot of key areas and programs this community values.”

Bailey, who spearheaded the effort to establish a meals tax increase for affordable housing, apologized for some of the fireworks during the process.

“As many of you know, especially here on the dais, during my time here on council, I can get pretty passionate about a lot of things. … I’ll try to lighten up on my passion a little more, but that’s just the way I’m made,” Bailey said. “I appreciate everything the restaurants are doing, and I would be the first to encourage the residents to go out and visit our restaurants. I will be doing a lot to support that.”

Jinks, with the FY19 budget approved, said he looked forward to finding solutions on public safety pay throughout the next budget cycle.

“I would also like to thank the seven of you for a largely thoughtful process with 70some questions, good areas of discussion and particularly appreciate you supporting compensation I proposed for city employees and, in particular, when additional issues
came to the forefront to put that in the public safety contingent,” Jinks said. “I look forward to coming back with a recommendation in September on how to allocate those dollars — what we have in front of us are more dollars than we have to allocate, but we’ll work to come up with a balanced and responsible proposal.”