Norfolk homeowners to see assessments decrease slightly

NORFOLK

Most homeowners and businesses will see a small drop in their real estate taxes on July 1, City Manager Regina V.K. Williams said.

Williams told the City Council on Tuesday that real estate assessments on homeowners will fall an average of about 3 percent in the budget year that begins on July 1. The average assessment on older homes will fall at a slightly higher rate, she said.

Assessments on businesses will decline an average of about 5 percent, she added.

It is the first time in two decades that assessments will fall. However, Larry Gregory, who heads the Norfolk Tea Party II, a group that has advocated for lower taxes, said assessments aren't falling fast enough.

Residential real estate assessments were flat last year in Norfolk while they declined 4 percent in Virginia Beach, which projects an overall 6.5 percent decline this year.

"Three percent doesn't appear to accurately reflect what homes are selling for now," Gregory said, adding that he expected a double-digit decrease.

Mayor Paul Fraim defended the assessments, saying new home construction kept the number from dropping more than it did.

Regina Williams and budget director Ron Williams Jr. told the council that the city faces large deficits each of the next five years. By law, the state must trim spending or raise taxes to balance its budget.

Because of declining revenues, the city's budget will shrink next year for the second year in a row. Even so, Regina Williams said that if the city does not reduce spending beyond current projections, it will run a $36 million deficit in next year's budget. If an $18.6 million reduction in state funding for the schools is included, the deficit runs to $55 million.

There will likely be no raises for employees and layoffs are possible.

The projected deficit for the budget that begins July 1, 2011, is $83 million, Ron Williams said.

"We'll be doing the core services people expect, such as public safety, water and trash pickup," Fraim said. But otherwise, all departments must reduce their budgets, he said. Regina Williams has already asked most city departments to trim their proposed budgets by 5 percent.

Ron Williams told the council that the city faces nearly a $5 million deficit in the current $1.1 billion budget unless costs are reduced. Regina Williams has ordered a hiring freeze and other cuts, including a reduction in police overtime.

She is also considering a one-day unpaid furlough for city employees. Ron Williams said that would save the city more than $1 million.

"It's something we'd like to avoid, but if we don't have enough savings in other areas, then we may have to do it," Regina Williams said.

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