The Virginian-Pilot
©
GOOD NEWS. I think.
The Virginia Beach City Council may finally be ready to cinch the city's belt.
After years of profligate spending, next year's proposed budget is set to rise by only 2.1 percent, according to a story in Wednesday's paper.
This sudden attack of public parsimony is rooted in a scary and sustained downturn in the real estate market. It wasn't until residents' most solid investments got sucker-punched by the market that city leaders felt the need to put the brakes on spending.
The Resort City's proposed $1.76 billion budget, unveiled Tuesday, cuts corners by reducing raises from previous years for municipal workers, the Pilot reported. Under this plan, they will get a measly 1.5 percent pay raise - plus $1.9 million in bonuses - while school employees will see their salaries go up 3.5 percent.
This is terrible news for public servants. Still, there's no point looking to the private sector for sympathy. Pay increases out here in the cruel nongovernmental world have been anemic for several years.
The best news - at first glance, anyway - is that city honchos plan to freeze the real estate tax rate at 89 cents.
Before we break out the beer - no one's drinking champagne these days - Beach civic activist Reid Greenmun floats a sobering thought.
"This will not be a tax rate freeze," he insisted Wednesday. "It's a tax increase."
The only way the tax rate would be truly frozen is if property values went up less than 1 percent, he said.
Ah, yes. It's all part of the property tax shell game. During the crazy real estate run-up, city councils would crow about "cutting" the tax rate while skyrocketing property values meant that our bills still went up.
If real estate values continue to climb - unbelievable as it seems, Beach officials predict a 2.5 percent increase - keeping the tax rate static actually will mean another increase.
So, unless the value of your house in Virginia Beach remains the same or declines from last year, an 89-cent tax rate will result in a higher bill.
Sometimes good government types, like Greenmun, can be such spoilsports.
Despite meager raises for workers and a new boat tax that's sure to outrage local skippers, there is still a bit of the old it's-not-our-money spirit we expect from Virginia Beach politicians in the new budget.
Richard Quinn reports that the proposed capital plan includes $3.15 million for a fancy pedestrian bridge linking Town Center with Pembroke Mall.
Amazing, isn't it? Millions are able to hoof it across Times Square in New York City, but the few folks who want to cross Virginia Beach Boulevard in the city's manufactured downtown get a bridge.
Here's a brilliant idea, courtesy of Mr. Greenmun.
Tolls.
If user fees are the best way to pay for new highways, tunnels and bridges, they make perfect sense for footbridges, too.
"If people wouldn't be willing to pay to use the bridge," he said, "maybe it isn't needed."
There's a thought. And that's $3.15 million saved.
Kerry Dougherty, (757) 446-2306, kerry.dougherty@cox.net
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Well, thanks for at least
Well, thanks for at least considering the points that I have made. In truth, I would think we would share some objectives. That is, I support new initiatives that add value to the commercial tax base because in the long run, I believe that the residential taxpayers need to have support from other sources of revenue, and the commercial tax base is one of those sources. The question then is how best to achieve that objective. Frankly, most private development follows exactly the model you have outlined, as do the projects of the company for which I work. But in certain circumstances, I support PPEA's which stimulate the investment of private capital to create a project that has much greater impact than would have been the case with just private capital. Why? Because when this happens, the city, on behalf of taxpayers, is first in line to collect extra tax revenue. In fact, the lien of the city comes first before the mortgage. Sales taxes, meals taxes, admission taxes, room taxes, all keep our residential real estate taxes as low as possible. To me, that is an outstanding strategy.
Well Mr. Barrett, as usual
Well Mr. Barrett, as usual we will have to agree to disagree. I don't believe it is the function of government to finance private ventures with public money. The function of government in this case is to give the entrepreneur the opportunity to develop land, acquire wealth for himself/herself and for their investors. The city can't lose as it will collect taxes on sales and real estate and yes it will provide some jobs. How long, if ever will Virginia Beach see a return on it's investment at town center? Has it seen it's return on investment for The SportsPlex? I don't think so. If you want to develop land for commercial business, use YOUR money, not mine.
The Problem, Mike: Transit
You can't effectively do urban redevelopment around Sportsplex in that there's no real transit in the area. Town Center is along the Norfolk Southern ROW, the convention center HQ hotel at the line's eastern terminus, etc.
The closest transit is HRT Route 33, an hourly bus route which goes from TCC to the Municipal Center via PA Road. (It then shoots up General Booth to your neighborhood.) To get LRT to that area you'd either have to go down PA Road from Newtown Road or down the General Booth Corridor from the convention center. Either would require a myriad of condemnations.
While I'm 110% in favor of a MLS franchise, we need a realistic plan for doing it.
Yes, I am basically
Yes, I am basically describing the same thing as occured at Town Center, and may be the basis for development of the dome site and the new hotel at the convention center. Frankly, these techniques are used throughout the nation, and have formed the basis for public private ventures that have stimulated growth and development both within the tax district and around it. Sure there is some risk, but let us also assess the risk of doing nothing. Perhaps you are aware that the land on which town center is now developed had been recommended for central business type development for years as one developer after another came forward but could not make it work. It has worked now. But what I hear you saying is that despite the evidence in our own city that a PPV, properly conceived and constucted, using the financial techniques described herein, is too risky and should not be pursued. I think your views are firmly entrenched in the last century and do not serve us well today.
You are assuming the city
You are assuming the city government would issue bonds or go into debt for the venture and establish a taxing district that would charge the owners of the business a higher tax rate than normal. Assuming the businesses are successful in order to pay the taxes, then the bonds would be paid back with some sort of interest. The only thing the city should issue bonds are for projects such as local road construction, city sewage replacement/repair and things of that sort. The functions of local government. I don't see shopping malls and MLS stadiums and parks for rich ball clubs fit that criteria. As for your statement that it relieves the pressure on the real estate tax rate, I don't believe that is true. The citizens have to rise up and cause a stir before they see any relief. If that were true, the taxes wouldn't go up at all. At least a year or two. Whatever increase in profits the cities accrue, they end up creating ways to spend it, or go into debt for something else. Like adding 1/2" to a swimming pool. Cities have come to respect spending taxpayer money like chickenfeed.
Yes, it would be best if we
Yes, it would be best if we were all omniscient and therefor only invested in projects that fulfilled their pro forma. In the case of the Sportsplex, if Council established a TIF (tax increment finance)district, sold the stadium and surrounding property to a developer that had obtained an MLS franchise and prequalified for an initial investment, issued bonds to be paid back by the increased real estate tax, expanded the Sportsplex to 24,000 seats and made improvements to the public infrastructure, would that qualify as priming the pump? Now let me acknowledge that I have the same objective that I think you have; that is, create new economic development, an increase in the size of the commercial tax base, new commercial ventures that provide jobs and opportunity and pay for employees, so these projects can relieve the pressure on the residential real estate tax rate. Frankly, that is what cities around the nation have done, not just with MLS stadiums, but with other amenities that attract young, creative, entrepreneurs.
Downtown developement
Daniel, you are free to chime in or contribute anytime. The rules of this forum is governed by The Virginian Pilot. The Pilot controls censorship on these blogs. Not government. A republic or democracy has nothing to do with it.
To answer your question Mr. Barrett about "priming the pump", it depends on what that pump is being primed. If it is priming it with opportunity, then yes. With taxpayer subsidizes then absolutely not. Local government can evaluate plans the developer has, sell them the public lands and let them have at it. I just object to taxpayers having to bail out failures of local ventures such as Waterside. It's like me buying 1000 shares of stock in a company for $100. The market takes a nose dive and the shares are now worth $1.00. Is it right that I get the city to reimburse me the $99,000 I lost?
I remember I used to go to downtown Norfolk in 1974. You could barely walk on Granby street due to the high volume of people and businesses down there. They should have left well enough alone.
Well Daniel, you are not
Well Daniel, you are not required to keep reading. In regard to Granby Mall, Norfolk joined with thousands of small cities throughout the nation which tried to come to grips with the trend toward suburbanization and the crowning of the automobile as king. But to the point, is it the responsibility of local government officials to "prime the pump" to create the opportunity for local growth and development? I of course would say yes; I think you would say no. I point to Waterside as an example, so do you. So is there anything to be learned from this particular event? Frankly, I opposed it at the time, thinking that it was up to the private sector to develop shopping centers. However, I have come to appreciate that cities with citizens who really care about their environment will develop consensus about what has to be done to restore public credibility in their city. In this case, I think Norfolk exhibited vision and leadership for which the subsequent development of downtown is the proof and the payback. Thanks you Dr. Andrews; may you rest in peace.
Like to hear themselves speak
The comments here are perfect evidence for the notion that the public should be allowed to comment once per article. If Mike and Keith are so smart, why aren't they...? Oh, well, this is perhaps what our founding fathers had in mind when they created a republic instead of a democracy.
Contractorva
Parish the thought sir. No offense taken by me. I am humbled that you have taken great interest in our debate, and appreciate the arguments we have presented here. I hope it has provided you food for thought.
r/ Keith