Richmond City Council and School Board members hear a presentation on school facilities from Interim Superintendent Thomas Kranz. (Photo by Sarah King)
While Richmond Mayor Levar Stoney continues to make the case that his proposed meals tax is the best way to fund school improvements, some City Council and School Board members aren't so sure.
At the first quarterly Education Compact meeting of 2018, attended by 21 School Board and City Council members on Monday night, Interim Superintendent Thomas Kranz spent much of the first hour reviewing Richmond Public Schools facilities' well-documented and dire need for repairs — or long-overdue new facilities.
Kranz showed the audience photos of water heaters neglected for years, mold inside and outside of classrooms, and ceiling tiles he had to explain were covered in dust – not black mold.
"There's buildings that if you asked my facilities team tonight ... we'd tell you there's two schools that we worry about every day," Kranz said. "And if they failed, we wouldn't have a solution."
His comments set the tone for the second half of the meeting, in which Stoney argued that his controversial proposed meals-tax increase was the most viable solution to help fund the schools modernization plan.
"I know some have argued we can find funds for our schools' needs without raising additional revenue,” Stoney said, adding, “I don't have $150 million in the seat cushions at City Hall."
In fact, the city's debt capacity is far from that figure, as David Rose, one of the city’s financial consultants with the firm Davenport & Co., explained to the audience. To meet the city’s total existing debt service would require finding $19 million “before we can even start” to consider funding facilities, he said.
Rose explained that Stoney’s proposed 1.5 percent addition to the meals tax — adding up to a total of 7 percent — would help create an additional revenue stream to feed into the “Capital Acceleration Program” (CAP), specifically intended for new school construction by generating $9 million in the first year and growing in subsequent years.
In other words: Without the tax, the city only has $66 million already tied up for city and school projects that do not include new facilities; with the tax, and an estimated additional $150 million in revenue, the city has a total debt capacity of $216 million through 2023, and $558 million over the next 10 years.
“I think we can all agree we can’t be paralyzed by our past,” Stoney said. “[We must] be prudent about the dollars we have available to us.”
Some Council and School Board members expressed everything from reservations to clear distaste for the tax proposal, however.
Fifth District Councilman Parker Agelasto asked if anyone had considered a longer repayment period, such as a home mortgage payment, performance contracting, historic tax credits or a cigarette tax such as the one he proposed last year.
“I don’t think it’s fair to put the onus on one tax bracket or constituents,” Agelasto said, adding he doesn’t think it’s fair to increase the meals tax when “there are frankly significant eateries around the city who do not — and I’m specifically calling out VCU — when they do not pay meals tax on campus.”
While a cigarette tax would have also been an option, Rose’s presentation stated the revenue stream would have been from a “declining source,” “less reliable” and “too small” compared to the meals tax.
Fourth District Councilwoman Kristen Larson said she thought taking a line-by-line-item approach to the city budget might be helpful too, because — as she noticed in her district — some funds allocated for certain projects never actually come to fruition.
Larson’s 4th District School Board counterpart, Jonathan Young, said he, too, thought a good first step would be for the School Board to clean up its finances and match the city dollar for dollar.
“Speaking candidly, the dirty little secret is that, in my opinion, we are spending money in all the wrong places in RPS,” Young said, “and I think it’s going to be very difficult to build any credibility.”
Others took a more hard-line approach.
“We’re in this room contemplating a tax increase, but we haven’t even seen the budget,” said 2nd District Councilwoman Kim Gray, “I think there’s some bigotry of low expectations.”
Gray said she thinks the city needs to “explore” more options before “we hit an industry that was promised the tax would go away.”
More than a decade ago, the city upped the meals tax by 1 percentage point to raise money in a similar fashion for the Richmond CenterStage performing arts center — which city Finance Director John Wack explained is still subsidizing the debt service related to that project (now called the Dominion Energy Center), as well as the Altria Theater and the Coliseum.
Wack also said the meals tax was a fairer alternative than other options, because it would not fall solely on city residents; more than 30 percent of visitors travel from a 50-mile radius around Richmond.
Also, according to the most recent statistics from the Labor Bureau, households in the top 20 percent of income spend almost five times more than households in the lower 20 percent on discretionary meals outside the home.
Speaking in favor of the mayor's proposal, School Board Chairwoman Dawn Page launched an emotional appeal, asking her colleagues to agree on a funding solution sooner than later “for the children.”
“This board, we've done our due diligence, we've fulfilled our responsibilities and we've presented the best facilities plan available,” Page said.
“Not to make this investment for our children, educating our children, that is very concerning ... and some of us sit around this table who have served on this board before … take a look at yourself and ask yourself, 'Are these children worth the investment?' ”
Cheryl Burke, the 7th District School Board representative, also emphasized the need to act quickly. "Since 1998, as we all know, when Gov. [L. Douglas] Wilder was mayor, there were plans to rebuild George Mason [Elementary School]. When I go into a school in the East End, I think about my own children," she said. "In the year 2023, will there be somebody else sitting in this chair still talking about rebuilding schools for our children?"
For Gray and 8th District Councilwoman Reva Trammell, the fundamental issue had less to do with patrons and more to do with business owners who would be affected by a higher tax.
“ ‘We might have to lay people off; we might have to close our restaurant,’ that's what I'm hearing,” Trammell said in response to Page before abruptly leaving the meeting early.
Gray recently met with nearly 60 restaurant owners in her district whose businesses have been already affected by the Broad Street construction for the GRTC Pulse bus rapid transit line. She has advocated for taking a portion of the early-completion incentive money — totaling more than $3 million — that the BRT contractors failed to earn and reallocating it to restaurants affected by construction.
Several restaurants in Gray’s district have been hard hit on Broad Street, including the Pig and Pearl, which shuttered its doors at the end of November.
“I think we do all need to go back to the drawing board,” Gray said.
