Wednesday, October 5, 2022

Williamsburg repeals Tourism Development Fund ordinance; sales tax to increase this summer

City Council voted to repeal ordinances for funding for the Tourism Development Fund, and also voted to pass their fiscal year 2019 budget. (Steve Roberts, Jr./WYDaily)
City Council voted to repeal ordinances for funding for the Tourism Development Fund, and also voted to pass their fiscal year 2019 budget. (Steve Roberts, Jr./WYDaily)

WILLIAMSBURG — After an arduous budget season, Williamsburg has set its fiscal year 2019 budget and set in motion a regional collaboration for tourism promotion.

City Council unanimously voted in favor of the $34.19 million budget Thursday at its monthly meeting.

In a corresponding vote, the council repealed funding for its Tourism Development Fund, allowing Senate Bill 942 to take effect July 1.

The TDF was passed in the summer of 2017, increasing taxes on hotel stays, prepared food and beverages. The fund was designated to develop tourism projects within the city.

Senate Bill 942 was contingent on the repeal of the TDF. The bill, which was approved by the General Assembly, will increase the sales tax rate by 1 percent in Williamsburg as well as York and James City counties.

Half of the funds generated by Senate Bill 942 will be used to promote tourism in the Historic Triangle. The funds will be administered by a newly created Tourism Council overseen by the Greater Williamsburg Chamber & Tourism Alliance.

“It’s an opportunity for this council to take a bold step toward making transformative outcomes both for the city of Williamsburg and for the region,” council member Barbara Ramsey said.

She added she was pleased that the tax revenue resulting from the Senate bill will be distributed across the community, rather than burdening certain industries like the TDF ordinance.

“It’s not perfect, but it sets the stage for the City of Williamsburg and James City County and York County to have the resources to make substantial changes,” Ramsey added.

The remainder of the money raised from the increased sales tax will be given back to the localities.

City staff estimate the increased sales tax will generate nearly $1 million for Williamsburg.

The TDF ordinance was repealed in a 4-0 vote, with Mayor Paul Freiling abstaining, citing his decision to abstain when the TDF was passed last summer. The TDF itself will remain in place but will now be funded by the means laid out by SB 942.

The new budget also increases Williamsburg’s property tax rate by 3 cents per $100 of assessed property value. The increase stems from higher costs for education and public safety and a 0.7 percent increase in expected real estate assessment, according to meeting documents.

The increase is projected to produce more than $600,000 in revenue.

Freiling said WIlliamsburg’s low real-estate tax rates have historically been “subsidized” by tourism dollars. He said it’s vital the city invest in tourism to boost the local economy, and if the Senate bill does what it’s designed to do for tourism, the city may be able to avoid raising property taxes in the future.

“The reason property tax rates have been as low as they’ve been for as long as they’ve been is because people come here and leave their money behind,” Vice Mayor Scott Foster said.

Williamsburg James City County Schools will receive nearly $9.5 million from the city in the upcoming fiscal year.

One new firefighter, one new police officer and two school resource officers will be hired in fiscal year 2019.

An additional $7.44 million will be spent on capital improvement projects.

York County passed their budget last week, and James City County passed their own on Tuesday.

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