Campbell County officials may consider meals, room tax

Campbell County officials may consider instituting meals and occupancy taxes as they stare down an expected multimillion-dollar funding gap in 2012-13.

Much of that budget strain — possibly as much as $6 million — will come as the county school division faces a loss of federal stimulus monies as well as a possible drop in state funding for schools and a proposed increase in the amount it pays into the Virginia Retirement System for teachers, among other budgetary challenges.

The funding gap is expected to grow to $7.5 million in fiscal 2013-2014.

“The decline in state revenue for public education is going to be so significant,” said County Administrator David Laurrell, “that without a significant source of additional revenue, public education is going to suffer.”

Meeting at their annual retreat this week, county supervisors and school officials outlined pending revenues and expenditures.

In addition to the need to cut expenditures, county staff presented the idea of meals and occupancy taxes early on in the retreat, suggesting some of the money be earmarked for the school division.

Currently, Campbell and Appomattox counties are the only two localities in the area without a meals tax. And only the town of Brookneal and the counties of Campbell and Appomattox do not charge transient occupancy taxes — basically a tax on hotel/motel stays.

A meals tax of 4 percent, the norm in this area, could generate $1.5 million annually, said Alan Lane, the county’s director of management services.

An occupancy tax of 2 percent, also about average for this area, could generate about $150,000 annually.

The towns of Altavista and Brookneal, both in Campbell County, generate $800,000 in annual revenue through meals taxes.

The taxes would not generate revenue until 2014. To close the current budget gap, deep cuts are expected.

Laurrell said the county is likely to leave unfilled positions open and look for opportunities to consolidate in order to cut about $2 million in expenditures.

“There’s going to be some pain,” he said.

If the tax discussion proceeds, supervisors said they want to place a referendum before voters for approval. It will be the second time the county has attempted a meals tax.

In 1996 an appeal failed, supervisors said, in large part because the board itself was split on the issue.

This week, all but one supervisor, newcomer Jim Borland, expressed support for the taxes.

Borland, who missed the beginning of the retreat, said he campaigned against taxes and would need the support of his constituents before he could support such a measure.