Portsmouth city manager proposes 8-cent tax rate hike

Editor's note: Because of an editing error, the projected real estate tax bill figures were miscalculated. The story has been changed to reflect the correct annual tax figures.

PORTSMOUTH

City residents face an 8-cent increase in their real estate tax rate in the coming budget year under a $563 million budget proposed by City Manager Kenneth Chandler on Tuesday.

The rate increase would help fund a $2.3 million plan to retain more police officers and firefighters.

It also would allow the city to set aside money for new court facilities and help offset a potential fee increase for household waste pickup.

But it would reverse a five-year trend of reducing the tax rate. And it comes at a time when the average city assessment has remained flat, despite a tanking economy.

For a home valued at $175,000, the manager's proposed $1.29 tax rate would increase the annual real estate tax payment by $140, to $2,257.50 from $2,117.50.

Chandler's proposed budget also calls for cutting city funding to the school system by 2.25 percent and to some civic organizations, including the Virginia Sports Hall of Fame, by about 11 percent.

The school system, which requested funding level with last year's $49.7 million, would see $1.1 million less under the proposal.

Chandler's budget does not call for any layoffs, furloughs or unpaid holidays for city employees. It does call for eliminating more than 100 vacant full- and part-time city positions.

But the proposed increase will also generate about $700,000 for the city to put away to help pay for the construction of court facilities. Portsmouth officials face state action to build a new courts complex.

The proposal also would not dip further into the city's undesignated fund balance.

City officials have used money from the fund to balance Portsmouth's budget in recent years, leading to the risk that the city's bond rating would be downgraded.

Other highlights of the proposed budget include:

- $2.1 million to offset a proposed increase in the Southeastern Public Service Authority's residential trash rates to lessen the impact on residents.

- No wage increases for general wage city employees or cost-of-living increases for city retirees.

- Increasing senior tax relief by about $600,000 but capping it at $3 million.

- Increasing some building fees and the cigarette tax to 60 cents from 50.

Jim Swan, president of Portsmouth's Fraternal Order of Police and a Portsmouth resident, said the tax increase would be hard for everyone to accept.

But he recognized city leadership's commitment to the plan, which he says is necessary.

"Five years ago, I was working part-time to supplement my income. Now I'm working part-time to pay bills," Swan said. "That's the reality of public safety in Portsmouth."

Steve Carroll, president of the Portsmouth Taxpayer Alliance, said of the proposed tax increase, "It's going to be very unpopular, but I don't know that there's any way around it right now, because we do have to have a balanced budget."

He said he didn't have any qualms about paying more taxes to fund the public safety pay plan. "But 8 cents? I think somebody has a whole lot of explaining to do," Carroll said.

Chandler also noted his budget does not call for any new capital projects.

City leaders are scheduled to hold work sessions and public hearings on the proposed budget for the next five weeks.

The council will vote on the adoption of the budget May 12.

Jen McCaffery, (757) 446-2627, jen.mccaffery@pilotonline.com