Norfolk council says real estate taxes likely to increase

NORFOLK

Real estate taxes appear nearly certain to rise again when the city adopts its budget in May. That much seemed clear after a 90-minute City Council budget discussion Tuesday.

Asked to state anonymously what they would prefer to happen to eight revenue sources, six of the eight council members said they prefer to keep the tax at the current rate, $1.11 per $100 of assessed value. Two voted to drop the rate.

No one asked for an increase, but because of rising real estate assessments, taxes would go up for most homeowners if the rate remains the same. Although the city's residential real estate prices are stagnant, assessments are based on data as much as 18 months old, when the housing market was still hot.

Last year, the council approved a 16-cent reduction, which was supposed to keep the tax bill for the average homeowner even. Yet with residential assessments rising at more than 17 percent, the tax for the average homeowner increased slightly.

Real estate assessments are expected to rise about 3 percent this year, with residential property likely to increase even more.

Councilmen W. Randy Wright and Don Williams said they preferred to drop the tax rate, but Williams acknowledged, "It's too early at this point to say what we're going to do. "

Last year, the council dropped the tax rate after the Norfolk Tea Party 2, an anti-tax group, gathered 16,000 signatures demanding cuts. There appears to be little support on the council to reduce the rate this year.

"This is going to be a very difficult budget," Vice Mayor Anthony L. Burfoot said.

City Manager Regina V.K. Williams asked for the council's input before she starts putting her budget together.

Tuesday's discussion was a sober one. The city faces an $18 million deficit in the next budget, and that's without giving pay raises or funding new programs, city officials have said.

In the anonymous computer vote, most council members said they didn't want to increase seven other fees and taxes, including meal taxes, recreation fees and water charges. The exception was the personal property tax on boats, which four council members want to increase.

The top spending priority was nearly unanimous - public safety. Mayor Paul Fraim noted that on a per capita basis, the city spends more on public safety than any other in Hampton Roads. Wright said that number needs to increase.

"If people don't feel safe, then nothing else matters," he said.

Funding public education was a close second, with much discussion about the School Board's plans to replace Crossroads Elementary School. Since it was proposed several years ago, the cost has more than doubled, and funds once pledged by the School Board aren't available.

The city, which previously set aside $4.6 million for the project, will set aside $9.4 million in the upcoming budget and $10 million in the following budget, meaning construction won't start for several years.

"At this point, the city is going to have to pay for it completely," Williams said. "We had anticipated about $10 million from the school system, and that won't be available."

Wright said he was appalled by the poor condition of the school. "They have to cover computers with plastic when it rains," he said.

Yet with other huge costs in the next capital improvements budget, including $30 million for a courthouse project and $27 million for light rail, Williams said the city can't afford to fund Crossroads sooner.

Fraim said the School Board needs to consider closing some schools, given the steady decrease in students. School officials have been exploring whether to close Oakwood Elementary School, which could happen as soon as next fall.

Administrators have also suggested consolidating the city's alternative education programs, a move that could free as many as four campuses for other uses or be returned to the city.

"We haven't closed a school building in the city in at least 20 years," Fraim said. "If we're going to be asking ourselves tough questions, then we need to get everyone involved. They need to make some tough calls."

Staff writer Amy Jeter contributed to this report.

Harry Minium, (757) 446-2371, harry.minium@pilotonline.com