Dining out? It could cost a bit extra.

Chesapeake mulls meal tax increase; over $2.7M in revenue projected

CHESAPEAKE — Diners eating out in Chesapeake will see a modest increase in their restaurant bills starting this summer if the City Council approves its proposed budget Tuesday.

The city is mulling a 0.5% bump — from 5.5% to 6% — in the meal tax to fund pay increases for public safety personnel. The change might not be drastic in dinner checks — the tax on a $60 dinner bill would increase by 30 cents, for example. But it’s projected to add $2,724,806 to city coffers in the coming fiscal year, according to budget office director Jonathan Hobbs.

Chesapeake’s meal tax has been among the lowest in Hampton Roads — paralleled only by Virginia Beach, which charges the same 5.5%. In 2020, Virginia Beach slashed the rate for two months to incentivize residents to dine out amid the early COVID-19 pandemic.

The highest meal taxes are in Portsmouth, Hampton and Newport News. Those cities take in 7.5% on meals prepared by restaurants. Norfolk and Suffolk charge 6.5%.

The Chesapeake City Council also is considering a $3 per vehicle increase in automobile license fee rates.

The extra revenue is intended to help fund a new pay plan for public safety workers unveiled last year, Hobbs said. In total, the proposed increases in the meals tax and automobile licensing fees are projected to bring in $3.5 million.

“The increases to the automobile license fee and the meals tax are part of a package of policy options that City Council directed the City Manager to include in the development of the FY 2023 budget to provide sustainable funding for the public safety pay plan,” Hobbs wrote in an email to The Virginian-Pilot.

Like other Hampton Roads police departments, Chesapeake has sought to lure police officers to its ranks — and to retain existing officers — with boosted pay. A new pay plan for public safety officers went into effect in January, after the council approved it in December.

The compensation plan will cost the city $13.1 million in its first full year, Hobbs said.

Last month, the city’s police department reported 43 vacancies out of 404 sworn personnel positions. Overall pay for officers increased by 5% this year, according to a department spokesperson. Recruits make $45,213 — salaries which increase to $50,326 after an officer is certified.

Under the city’s budget proposal, Chesapeake residents’ real estate taxes would remain unchanged — which the council prioritized during budget deliberations. City officials also nixed a proposal to increase taxes on cigarettes and tobacco.

The increases are slated to go into effect July 1, if approved.