Meals Tax Proves to be a Huge Source of Revenue for Lynchburg

Lynchburg, VA - It's now one of the largest single sources of revenue for the city of Lynchburg.

The meals tax collected almost $12 million in 2012; a record amount, which officials didn't even see coming.

The explanation is plain and simple; folks in Lynchburg love to dine out.

And the proof is in the pudding, the pork, and the pizza.

"We've had such great success and we've been pretty lucky here, and I think it's only going to be getting better" said the Arosto Restaurant Manager, Matthew Fauske.

At Arosto, one of Lynchburg's newest restaurants, business is good.

"We've already gotten to know plenty of regulars over here and appreciate everybody's business when they come out" said Fauske.

They're just one example of a thriving food scene in the Hill City, with numbers to prove it.

In fiscal year 2012, the city of Lynchburg collected $11.6 million from the meals tax. That's up almost a million from fiscal year 2011.

And the total blew past the originally forecasted number of less than $11 million.

"It was a pleasant surprise. We had anticipated a double dip recession" said City Manager, Kimball Payne.

Payne says the tax, which is added on to the expense of all prepared meals, is a huge source of income.

"When you look at our real property tax, our personal property tax, and our sales tax, I think meals tax may be next in line around $11-12 million. It's a pretty important source of revenue" he said.

The 6.5% tax, Payne estimates, will only continue to boost city revenue.

"As the general population of the city continues to grow, and as our society changes and seems to be getting more comfortable with eating out because they're busy, we could see it grow" he said.

Any excess in city revenue is added to the general fund, and occasionally pays for capital projects.

The good news continues; this year, the Lynchburg meals tax is already $700,000 ahead of what was forecasted.