Beach manager proposes tax increases, job cuts

VIRGINIA BEACH

What’s in? Increased taxes, higher fees and cuts in positions.

What’s out? A trash fee, furloughs and layoffs.

City Manager Jim Spore unveiled his $1.8 billion spending plan on Tuesday, calling it “by far the most difficult budget we’ve had to bring forward.”

The proposal is  nearly a 7 percent reduction from  this year’s budget and would include:

• A 3-cent real-estate tax increase to 92 cents for every $100 of assessed value. The owner of home worth $290,500 – the average assessed value in the Beach – would pay $79 less in real estate taxes under Spore’s plan due to assessments decreasing an average of 5.75 percent.
• A 10-cent increase on private vehicle personal property taxes to $3.80 for every $100 of value.
• A 4-cent increase on the cigarette tax, bringing it to 65 cents per pack.

The taxes would bring in $17.8 million.

The city had to cover a $111 million shortfall, which is up from the $84.4 million that officials had projected in the fall. The city’s share of the gap remains about $40 million. The increase is due primarily to the school  budget, which took a blow in state funding.

Under Spore’s budget, 200 positions would also be cut, half of which are vacant. But Beach officials don’t anticipate layoffs, as employees whose jobs are eliminated would be transferred to open positions. Officials estimate the cuts would save $19.4 million. The city would see additional revenue from parks and recreation and permit fee increases and savings from reductions in training and renegotiated vendor contracts.

Spore dropped his recommendation for a trash fee for now, after several council members opposed it. If the City Council wants to build and staff a new animal shelter and a recreation center in the Bayside district, Spore suggests raising the tax rate by another 1.1 cents.

“I think it’s a balanced approach,” said Catheryn White­sell, the Beach’s budget director.

Some council members were more skeptical.

“There is no need for a tax or fee increase,” Councilman Bill DeSteph said.

DeSteph and Vice Mayor Louis Jones said they want to see if the city can draw on savings from certain programs, like the agricultural land preservation and Sandbridge beach replenishment efforts, to avoid the real estate tax increase.

Virginia Beach is the only South Hampton Roads city so far to propose a tax increase to balance the 2010- 11 budget. Chesapeake and Portsmouth city managers have presented budgets that avoid real estate tax increases.

Still, most residents would see their tax bills decrease because of the drop in home values, and the increased rate would be the second-lowest in the region, White­sell said.

“The cost of the government on this community has decreased,” she said.

But one in three residents would  not get any real estate tax relief or could see some increase in their payments, because their home assessments didn’t fall drastically, Whitesell said.

Spore said his input from residents indicated  that most  were willing to pay additional taxes and fees as long as the city reduced spending. With the proposed reduction in library hours, less frequent mowing of the resort area, and delays in building renovations and road projects, residents would  feel the cuts, Beach budget officials said.

The City Council is scheduled to vote on the budget on May 11.   Deirdre Fernandes, (757) 222-5121, deirdre.fernandes@pilotonline.com