ROANOKE, Va. – Roanoke City Council has approved its budget for the next fiscal year, which means dining out in the Star City will soon cost a little more. The meals tax will increase from 5.5% to 6.5% beginning July 1.
This new rate is lower than the original proposal of 7%. At 6.5%, Roanoke will fall behind Christiansburg, which has a meals tax of 7.5%, and Lynchburg, which sits at 7%. However, Roanoke will surpass Salem City and Botetourt County, both at 6%, while Roanoke County maintains a rate of 4%.
The revenue from this tax increase will help fund overtime pay for employees and address a backlog in maintenance that previous administrations left unaddressed.
“On any given day, a visitor to City Hall may find an elevator out of order. They may find a sign on a water fountain advising them not to drink the water. That’s embarrassing, and I think that’s unacceptable,” McGuire said.
The plan approved by the council includes two proposals aimed at easing concerns from restaurant owners, including a credit for those who pay the meals tax on time.
The other would sunset, or end the tax increase, in 2027 unless it’s extended by council.
One restaurant owner at the meeting stopped short of calling the changes a win but said they were a sign the Council listened.
“Hopefully they see it as a temporary source of revenue, and it gives them a little bit of time to figure out where it went wrong with their own budget,” said Matt Bullington, owner of Texas Tavern. “I think having a greater conversation on the state level about how municipalities are funded so they don’t always have to go to the meals tax to get them out of a fiscal jam is something needs to happen sooner rather than later.”
Mayor Joe Cobb and Council Member Phazhon Nash voted against the sunset clause for the tax increase, stating it removed flexibility in case tough budget times continue.
“We heard a lot of mights and maybes today, but we don’t have any definite increase in revenue sources,” Cobb said.
The new budget approved by the council also includes changes to how the city funds public schools. Funding will remain the same as this fiscal year, which is below the usual 40% threshold. This decision creates a gap of more than $6 million in the Roanoke City Public Schools budget, officials have said.
Parents have circulated a petition urging the city to maintain the 40% funding formula, and members of the Roanoke City Council of PTAs and PTSAs attended the meeting to voice their concerns.
“Well-funded schools have smaller classrooms, more experienced teachers, and more support staff. Without Roanoke City schools being fully funded, Roanoke City students will not have the same opportunities as students in other districts,” said Kathleen Jennings, who attended the meeting.
10 News reported last week that the debate over school funding led to harsh correspondence between Turner and School Superintendent Dr. Verletta White regarding the use of leftover money from previous years to meet budget needs.
That policy is changing, but Mayor Cobb says discussions are ongoing.
“They have requested from us guidance on what they can count on receiving from the fund balance to help them address some of the gaps,” Cobb said.
Council members and city staff stressed they are “committed to meeting or exceeding” state funding requirements for public schools and are not mandating any cuts by RCPS.
The council will meet next week to consider that request. The Roanoke City School Board is scheduled to meet tomorrow night to discuss the potential impact of the council vote. Their budget is expected to be finalized next month.