Roanoke’s Tax Increase on Prepared Meals Produces Positive Results

This is cross-posted at Rustic Observer.

As someone who spent years organizing around education issues, I’m well aware of how our schools are constantly underfunded and receive the blunt of the blow when it comes to budget cuts. These funding gaps have a devastating impact on schools districts that are already desperately trying to improve failing schools, keep quality teachers in the system, and prepare students for the 21st Century job market. So when Roanoke’s schools were facing an enormous budget crisis, the city council decided to take action and unanimously passed a two cent increase in the prepared-meal tax.

While this move would help fund the schools, there were a lot of people who were also concerned about how the increased tax could impact local restaurants. Families on a tight budget were already cutting back on eating out, after all, and there was some concern that an added tax might cause them to go out even less. Those concerns have proven wrong, however, partly due to a program that officials have called “Eat for Education.” The program is essentially an intense PR campaign that promotes eating at local restaurants.

In the end, this has created a lot of good for the City of Roanoke – both for the schools and the restaurant business. Those results have caused Roanoke to get a lot of praise, including an article written in Governing magazine that highlights the positive impact of the campaign.  

The buzz worked. The tax brought in $4.6 million in the first year, and second-year receipts also are exceeding projections. Meals-tax revenue is up 2.5 percent, after factoring in the rate increase. And restaurants have not suffered. Some owners have told Carson that they are actually doing better now. Roanoke residents make sure that their destination restaurant is within the city limits.

Bishop and her team are delivering results with these added funds. For the first time, all of Roanoke’s schools are accredited. The graduation rate has increased to 76 percent. Key to that success is what happens in the summer. Roanoke’s enhanced summer school now helps remediate 2,600 students. When kids arrive in the fall “caught up,” they have a much better chance of graduating. Bishop’s strategy also includes Forest Park Academy, a special school for students who have been socially promoted or are at high risk of dropping out. Forest Park has produced more than 400 graduates in the last three years.

As the folks over at Blue Ridge Caucus pointed out, it’s also worth highlighting how the article mentions that nobody who voted for the tax increase lost their election in 2010. Even non-incumbents who were leaning towards supporting the measure also won a seat on the council. This seems to confirm that the public is willing to have a slight increase in taxes if it means keeping critical programs (like a quality school system).

This is something that should be considered as we’re currently seeing a debate in Washington over whether or not the wealthiest one percent in the country can afford to pay their fair share in taxes. That being said, it seems like every single time the Democrats always end up caving in on the issue have an opportunity to have a slight tax increase on the EXTREMELY wealthy. Why? Perhaps because they’re afraid of the public backlash. But that’s an issue the Roanoke experience shows a good PR campaign can properly address.

UPDATE: It’s worth noting that the tax increase is currently set to expire in the spring of 2012. The council likely won’t be making a decision on whether or not to extend the program until they’ve been able to look at the impact of the state budget on the school system. While the General Assembly might make some changes to the budget, the proposal that Bob McDonnell released yesterday seems to place its priorities on protecting the wealthy instead of providing the proper funding to our schools. It therefore looks like the council might need to extend the tax Eat for Education program.