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Advocacy Efforts Push Delay for Minimum Wage and Transient Occupancy Tax

Advocacy Efforts Push Delay for Minimum Wage and Transient Occupancy Tax
Advocacy Efforts Push Delay for Minimum Wage and Transient Occupancy Tax
Advocacy Efforts Push Delay for Minimum Wage and Transient Occupancy Tax
Chamber Governmental Affairs team works with lawmakers

The Hampton Roads Chamber works year-round to be an impactful advocate and set the conditions for businesses to succeed.  The past few months have been a whirlwind of activity with the General Assembly session, reconvene session, and COVID-19 restrictions.  Our team listened to our members, and a top concern for 2020 has been the legislation to increase the minimum wage. Of the 3,899 bills introduced, this was one of the highest profile.

Bob Pizzini, CEO of iFly Virginia Beach Indoor Skydiving, states, “The minimum wage increase has been a subject of great debate for many years. While an increase may positively impact some workers in VA, it will negatively impact my great team because we pay generous commissions in addition to an entry-level wage that is well above the current minimum wage.  The delay in the increase is particularly significant because of the COVID-19 crisis and the notable increase in unemployment pay and duration. City budgets are going through unplanned revisions due to COVID-19, and a minimum wage change during this pandemic would be impossible for businesses to address."

When the 2020 General Assembly Session convened, it was apparent that one of the priorities of the new majority was to raise the minimum wage.  Chamber staff and volunteers represented the business community and expressed concerns to members of the General Assembly. While the bill to increase the minimum wage passed in the House and Senate, many legislators worked to make compromises to lessen the harmful effects to businesses. The result of the bill includes the Virginia Department of Housing and Community Development, the Virginia Economic Development Partnership Authority, and the Virginia Employment Commission conducting a joint study beginning January 1, 2022. They will then decide to re-authorize the scheduled increase in the minimum wage to $15 by 2026. If they do not re-authorize the rate schedule, Virginia could remain at $12 an hour minimum wage. SB7 and HB395 are the bills increasing the minimum wage. The Governor's recommendation to both Chambers in preparing for Veto Session was to delay the start of the bills from January 1, 2021, to May 1, 2021, due to unprecedented times. Both the House and Senate voted to adopt the Governor's amendments delaying the start date by four months and going into effect May 1, 2021.  While we did not consider this the most optimal result, we feel legislators and the Governor heard stakeholders resulting in this delay.

Boyd Melchor and Dee Oliver, owners of Kelly’s Tavern, expressed their concerns.  “Obviously, now is not the time to mandate a whopping 31% increase in the Commonwealth's Minimum Wage, from $7.25/hr to $9.50/hr. Governor Northam was right in delaying it from January 2021 to May 2021 as a lot of businesses will still be hurting even if they survive this financial and medical disaster.”

Another priority issue for 2020 is the transit funding bills that permit the Hampton Roads Regional Transit Program to develop, maintain, and improve a regional network of transit routes and related infrastructure, rolling stock, and support facilities.  A portion of this program’s funding is a 1% Transient Occupancy Tax. During this time of a medical crisis and financial uncertainty, the hospitality industry would be gravely affected and further devastate a crippled industry. Diana Burke, Executive Director of the Virginia Beach Hotel Association, shared her thoughts. “On behalf of the Virginia Beach Hotel Association (VBHA), we strongly oppose the potential increase in the Hampton Roads Transient Occupancy Tax (HR TOT).  Although we appreciate the Governor deferring enactment of the bill until May 2021, we are very hopeful to have thoughtful discussion during the 2021 Virginia General Assembly.  Increasing the HR TOT by 1% puts the Hampton Roads hospitality industry in a non-competitive stance when trying to compete for meeting and convention business.  Now is not the time to hurt an industry that is already devastated by COVID-19.”

The Hampton Roads Chamber pushed to amend, to strike, or to postpone the inclusion of Transient Occupancy Tax (TOT) for several years to allow for review of the negative consequences of the pandemic. At Reconvene Session, the Senate and House adopted the Governor's amendment to delay the 1% Transient Occupancy Tax from January 1, 2021, to May 1, 2021.

Your Hampton Roads Chamber believes that fostering a climate for economic growth is achieved by consistently championing the principles of the free enterprise system.  The Hampton Roads Chamber's governmental affairs team provides policymakers with the information and perspective necessary to advance sound public policy that supports strong economic growth and Virginia's number one ranking as "Best State to do Business."



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