by James A. Bacon
Even to those who know him and love him, Sidney Gunst is a wild man. Friends never know what cause he will embrace next and pursue with his trademark (as in, monomaniacal) enthusiasm. Luckily for the taxpayers of Henrico County, he has embarked upon a crusade to block a proposal to institute a 4% meals tax that would raise an estimated $18 million a year.
Although Gunst is hardly alone in opposing the tax — local restaurateurs are none too happy with it either — his is the face of the resistance. The Innsbrook office park developer has galvanized opposition to a measure that the county political establishment and much of the business community have aligned themselves with. When civic groups hold debates on the tax, Gunst is the man they invite to represent the contras.
No one denies that Henrico faces major fiscal challenges. County officials are scrambling to find the funds to pay for massive unfunded pension liabilities, federal storm-water management mandates and soaring employee health care costs. And there is no question that county officials have taken extensive belt-tightening measures. The county is operating on less money than it spent six years ago.
But Gunst is not satisfied. He doubts the tax will come close to addressing the county’s long-term fiscal challenges. The tax is a Band-Aid, a short-term palliative, a way for elected officials to kick the can down the road and avoid making the really tough decisions or engage in the creative thinking that Henrico County needs in order to transition to a 21st-century philosophy of governance.
Gunst make several compelling points.
First, Henrico’s vow to dedicate tax revenues for public schools and the teachers is a political gimmick. In January, county officials were positioning the tax as necessary for road maintenance. But the 2013 transportation funding bill provided millions in relief for Henrico, so the pols switched rationales. And what could be more mom-and-apple-pie than securing teacher pensions? That’s pure packaging. As Gunst explains, money is fungible. While the $18 million in meals tax revenue might be locked in for teacher pensions, there is nothing to prevent the Board of Supervisors from backing out all or part of the $18 million — a sliver of the half billion-dollar school budget — that it had been paying before!
Second, if taxes must be raised, then jack up the property tax instead. Imposing the meals tax is like shooting a fire-and-forget missile. It will be permanent and the board likely will not revisit the issue. By contrast, the board sets the property tax every year. A meals tax would allow the board to dodge yearly accountability. By nixing the tax, taxpayers can better hold supervisors’ feet to the fire on spending and budgeting decisions.
Which brings us to the third point. The Henrico board is stuck in a rut. Board members are old and out of ideas. Henrico mastered the art of 20th-century governance. By conventional standards, the administration runs a tight ship. But the real estate crash and 2007-2008 recession ushered in a new era of austerity. Americans cannot continue business as usual. If Henrico is to prosper in the years ahead, it must re-think fundamentals.
Gunst doesn’t pretend to have all the answers — right now he’s just trying to defeat the meals tax. But he does offer areas worth exploring. Schools account for more than half the county budget. Why can’t we do more for less? The nation is in the midst of an educational revolution, with Massively Open Online Courses, free online content like the Khan Academy and so much more, all transforming the way people learn. Instead of teaching the way we’ve always taught — with laptops replacing textbooks — let’s unleash teacher creativity to incorporating online resources into their pedagogy. The Henrico school system was one of the first in the country to buy laptops for every high school student. Let it be one of the first to tap the online revolution to transform the learning experience.
That’s just the beginning, says Gunst. Henrico needs to push for reforms to the Virginia Retirement System, accelerating the shift from a Defined Benefits plan to a Defined Contribution plan. The county needs to review its real estate portfolio and sell excess property. It should look for functions to outsource or privatize. And (most importantly, in my book) the county needs to broaden its tax base by encouraging re-development and infill at greater densities. Gunst has been a player in the plan to transform Henrico’s main business district, Innsbrook, by means of walkable, mixed-use development. Other parts of the county are well-suited to re-development as well, such as the area around the Staples Mill train station, the busiest Amtrak station in the Southeast.
There is no lack of opportunities, if only Henrico would grasp them. A meals tax would anesthetize the local politicos to the need for fundamental change. Come November, Henrico voters need to reject the meals tax and demand more from their leaders.