The Virginian-Pilot
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VIRGINIA BEACH
City leaders will have about $81.2 million less than they counted on for next year's budget, the biggest shortfall in the Beach's history, finance officials told the City Council and School Board on Tuesday.
The gap could grow larger, depending on how much local funding gets axed from the state budget next month.
"Bottom line: It might get a lot worse," Vice Mayor Louis Jones said after the meeting, speculating the shortfall could approach $100 million.
Of the roughly $81 million, schools are expected to be about $42.9 million shy and the city about $38.4 million short.
As the economy contracts and home values fall, South Hampton Roads cities are looking to scale down overly optimistic budgets. Norfolk is facing a $24 million shortfall, and Portsmouth is looking at a deficit of up to $13 million.
For the current year, Chesapeake is facing a $12 million revenue shortfall, which includes a $1.2 million cut in state funding. The City Council is having a retreat tonight to discuss budget planning.
Falling revenue from real estate taxes, personal property taxes and business licenses exacerbated Virginia Beach's shortfall. Spikes in utilities costs, especially electricity, had a big impact, officials said.
What the deficit means to residents isn't clear. The City Council has until May to balance its budget under state law.
City officials had projected a $1.836 billion budget for the fiscal year that starts July 1. The latest projections show the city will have $1.755 billion, or $81 million less than expected, an amount that represents about 4.5 percent of the budget.
While the gap is unprecedented, the city regularly has to adjust to having less money than projected. Last year, the city dealt with a projected shortfall of $57 million by raising fees, scaling back programs and reducing annual increases in employee pay, officials said.
Next year's spending plan assumes 3.5 percent pay increases for school division workers and 2.5 percent increases for city staffers, together totaling $24.5 million, officials said.
About a quarter of this year's deficit - $22.2 million - is due to falling property tax revenue, which officials announced last week.
Personal property taxes - mostly on vehicles - are down by $16.5 million, and business licenses are down by almost $5 million, officials said.
Aaron Applegate, (757) 222-5122, aaron.applegate@pilotonline.com
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City v small business
My problem is government is supposed to work for the people not compete against it ....
They are running places out of business with selective enforcement of laws. and purchasing those same properties for developments at the Oceanfront ect It seems to me like a form of eminent domain....
Amphitheater drinking/noise v. the block ect..
Several studies prove small business is better for the community 40% of money circulates within as opposed to larger retail ect...Some cities have passed laws against big box development and have buy local campaigns...San Fran is one...They recently appeared as #2 to rebound after the recession in Forbes Research it.. Are City is doing it Bass ackwards so a few developers can profit....Wall-mart v. small business Doesn’t work..No business is safe if it is competing with the a city owned establishments. Town Center is doing it responsibly and supporting local business the oceanfront is not.....
Already
The puppet mayor sessoms isn't even in office and spore and company are already talking about budget shortfall and raising taxes. If you think this is bad, wait until the SPSA formula for budgeting is implemented in VB.
Stand by citizens, you are about to lose your shirt. No money in the budget but VB will pay for development in town center. Then once the carrier leaves for FLA, again the citizens will get hit with another tax increase.
I had to tighten my belt at home due to the economy. So should the city council. Pay for programs that are a reponsibility of government. If any money is left over, then buy the extras.
Hows the raise
Spore and Lilly---- How's that raise treating you?....Any plans to forgo the raises...Or will you just lay off a few of the people who actually do the work....
Bus is Coming and Sessoms cant' stop it....
An Essay on Man's Lust for Power John Adams,1763
“[D]emocracy will soon degenerate into an anarchy, such an anarchy that every man will do what is right in his own eyes and no man's life, property, reputation or liberty will be secure, and every one of these will soon mould itself into a system of subordination of all the moral virtues and intellectual abilities, all the powers of wealth, beauty, wit and science, to the wanton pleasures, the capricious will, and the execrable cruelty of one or a very few.” -
Whoever...
Whoever came up with that ridiculously stupid saying that "paying taxes is patriotic" is, well, ridiculously stupid. I wish some Boston tea party attendees were present to tar and feather that idiot. Paying some taxes is a necessary evil to provide for the basic necessities of government. It is NOT intended to provide public financing for developers. Municipal budgets are an exercise in realative scarcity, I agree, that is why low life developers should not have their slimy hands in what is already scarce. Virginia Beach has to make cuts and the first cuts have to be cutting off public financed private development, period!!!
Typical Mike
We all know that not every need nor want can be funded, and we know that the Commonwealth has retreated from its obligations, and it is clear that the same may be true from the federal government. Then if it's true that not every need or want can be funded, I have a suggestion.....
Let's stop funding what the developers like yourself "want" and I'm pretty sure we'd have enough or close to enough to meet the "needs".
Tell you what Mike, when SPSA's budget is balanced, then come and talk to us.
In Virginia Beach, the 30
In Virginia Beach, the 30 million dollars the School Board had left over from last year should not be spent but carried over to the next budget. Get rid of the Academy Programs. Make bus drivers slow down. Reduce the temperature in school buildings by 3 degrees. Turn off unused lights. Significantly reduce field trips. Reduce in-service days. Increase Drivers Ed fees. Charge for student parking. Increase ticket prices for athletic events. Higher fees for summer school. Collect money due for lost textbooks. Budget problem for the schools in Virginia Beach solved.
True Mike B..
......... "That said, I think our citizens have gotten used to a high level of services, and few will be willing to give up much in the way of programs and services".....
Put the real estate tax, currently .89 or so per $100. of assessed value back to 1.09 or similar to other cities, (1.19) and leave assessments where they are. When the housing market starts a comeback, re-visit the taxes at that time. Spending needs to be controlled now!
Allocation of scarcity.
My basic point is that every municipal budget is the allocation of relative scarcity. We all know that not every need nor want can be funded, and we know that the Commonwealth has retreated from its obligations, and it is clear that the same may be true from the federal government. That said, most of the daily services on which we depend are delivered by the city. So over the next five months, we will all have the opportunity to attempt to balance costs and revenues. That said, I think our citizens have gotten used to a high level of services, and few will be willing to give up much in the way of programs and services. Council will hear from all those who wish to have their say, and then they will decide on the size of the budget, what needs to be cut, if and how much additional revenue is feasible, and then they will pass a balanced budget. And yes, our friends in all the other cities will have the same opportunity; we just started sooner.
Mr. Barrett says...
it is simply a revision of the money the city expects to receive in the next budget cycle that begins on July 1, 2009 and ends on June 30, 2010. We will have ample opportunity to discuss cuts in programs, services, and benefits, and opportunities to collect more revenue through taxes, fees, or intergovernmental transfers This from a guy who sits on the board of SPSA that's, help me out here Mike, how many millions of dollars in the red? I also find it rather telling that the first thing you mention is cuts in programs, services and benefits when you scream bloody murder about the possibility of business's being taxed. Seems to me the Christmas buffet of taxpayer funded goodies for developers is exactly what got us in this mess and now you're looking to the homeowners who already pay more than enough in property taxes to pay up even more. It's time for business to pay their fair share, or do without the corporate welfare they've enjoyed for years.
Buy Local
Forbes has an article today the best Cities likely to bounce back exactly what I commented before San Fran has big box laws and buy local campaigns…The opposite of VB and Spore/Sessoms mentality.. Develop more and line his buddies pockets...What about the current business
Spore the Bus is comin
The best cities in which to invest are those that are considered gateways to international investment, have vital downtowns where people can forgo cars and don't have a glut of condos or office space.From Forbes
San Francisco comes in second, with a 6.12. The “City by the Bay” learned from the 2001 tech crash not to overbuild. There is a reasonable supply of office and apartment space, which should limit vacancies. San Francisco's port is also expected to help the city during the downturn as Americans continue to rely on Asian imports.