Apr 27, 2010
Life, Liberty & Lynchburg [March 30]: Survey shows student taxes impact local economy
by Amanda Sullivan
“Not bearing the responsibility of taxes in the city and still voting in the city elections is granting the students representation without taxation,” a News & Advance Letter to the Editor read on Oct. 15, 2009.
This point of contention between Liberty University students and the City of Lynchburg has presented itself in many letters to the editor in the local paper as many Lynchburg residents do not believe that students pay taxes.
“… The decision to register (Liberty) students to vote in Lynchburg has started me thinking,” a News & Advance Letter to the Editor read on Oct. 23, 2008. “Will their votes affect decisions in our city? Will they be required to pay the fees and taxes that the average citizen of Lynchburg has to pay?”
A recent survey conducted by the Liberty Champion shows that Liberty students do make a significant financial impact on the City of Lynchburg’s budget through paying taxes. The Champion received responses from 4,320 on-campus, commuter and on-line students. Of that number, 3,084 participants were on-line students. A total of 865 residential on-campus students took the survey, and resident commuter students comprised 371 total participants.
City Councilman Turner Perrow noted Liberty’s contributions to Lynchburg in a News & Advance article.
“(Liberty) is one of the only businesses in Lynchburg that is growing right now, and when they grow and bring in more students, they bring in more money to the economy,” Perrow said in the article.
The survey showed that students pay several types of taxes, including meals tax, lodging tax, car tax, sales tax and gas tax., and a portion of those taxes goes to the city with the rest going to the state.
The majority of the residential students who responded said that they frequent a non-fast food, sit-down restaurant between one and five times a week. During their visits, 26.1 percent of students spend less than $5 per visit, 38.9 percent spend $6 - $10 per visit, 24.8 percent spend $11- $15 per visit and 4.5 percent $16 - $20 per visit. If students only purchase $6 worth of food, they will pay approximately 69 cents in taxes. If they go two times a week, that becomes $1.38. Over the course of a month that becomes $5.20. If only 1,000 students do so, then tax revenues increase to $5,200 for the month and over an acamedic year (August to May) that becomes $52,000.
When students visit a drive-thru restaurant or local coffee shop, 62 percent said they spend an average of $5 per visit with 58 cents going to meals tax. According to the survey, most students visit drive-thru restaurants one to five times a week. If a student goes to a drive-thru twice a week, he spends $1.16 on meals tax. In a month he would spend $4.64 in meals tax. If only 1,000 students pay this tax, it becomes $4,640 for the month or $46,400 a year – just for having a sandwich, fries and a drink each time.
Fifty-four percent of students reported that they fill their cars up with gas once per week at local gas stations. If the average car has a 15-gallon tank, and the price for gas as of Sat., March 27 was $2.74, students were spending $41.10 every time they filled up, and paying $2.86 in taxes.
More than 380 on-campus and commuter students also said that they registered their cars with the City of Lynchburg. The cost for registering a car in the state of Virginia ranges from $26.75 to $49.75, depending on the type of car, according the Virginia Department of Motor Vehicles (DMV). The registration price for a car weighing less than 4,000 lbs is $38.75. This price multiplied by 380 equals $14,725 in taxes.
The survey also showed that 81.5 percent of commuter and residential students shop one to five times per month for necessities. The largest block of on-campus voters, at 56.4 percent, reported that they spent between $10 and $29 per visit. They were also paying sales tax at a rate of 5 percent. Their average purchases cost them between $.50 and $1.45 in sales tax.
Seventy-eight percent of the commuter and residential students responded that they bought niceties or things they want one to five times per month with 50.2 percent of residential students spending between $10 and $29 per visit. If a student went to the store at least twice a month and spent $20 on each trip or $40 a month, he would pay $2 each month in sales tax. Multiply that by the size of the student body (1,000) which equals $2,200 in sales taxes in one month or $22,000 for the academic year in sales tax on the things students want.
If the spending stayed the same at $20, but the trips increased to five times a month, the amount per student in sales taxes would be $5 per month. Multiply that by 1,000 students and the amount becomes $5,500 per month or $55,000 for the academic year.
“The real value of Liberty University to the city … (is) the students and their parents when they shop, eat and stay in the city. The city collects meals and lodging taxes plus the state collects sales tax from these activities — that directly affect the city,” Lynchburg Director of Financial Services Donna Witt said in the Champion’s Fall 2009 tabloid.
The survey reported that 81 percent of most of the students shop along Wards Road.
“The survey indicates students do make a contribution both to the economy in general and to tax revenues in particular,” Economics Professor Robert Rencher said.
In fact, some local restaurant owners and retail managers enjoy having Liberty in session because their revenue is directly tied to the academic calendar.
“If colleges (in Lynchburg) closed down, all business would automatically close,” Drowsy Poet owner Roy “Smiley” Ellis said. “Without college, there is no business.”
“Because I live most of my life in Lynchburg, I feel it’s only right to support Lynchburg by paying (local) taxes, including food tax,” senior Amanda Runions said. “However, because I pay taxes and live in Lynchburg, I feel it’s only right for Lynchburg (to let me carry out my civic duty) as a local voter.”
To see the full results of the survey and learn more about how Liberty students impact the City of Lynchburg economically, visit The Champion’s Web site at liberty.edu/champion.
Contact Amanda Sullivan at