$530M budget paints revival
Proposal thaws many items frozen last year amid the pandemic
HAMPTON — Multiple Hampton programs and jobs once put on ice are getting a spring thaw and will be funded by July 1.
That list in the city’s new budget proposal includes five police division positions, some in the Commonwealth’s Attorney office, elsewhere in the city and a slew of youth, workforce and housing programs that were placed on hold to help Hampton shed $12 million in costs last year.
It was a necessary strategy due to the uncertainty of projected revenues caused by the pandemic shutdown. A year later, even as life around Hampton Roads slowly cranks up, the city is still coming up about $6.2 million short on some needed revenues.
“This is a no-surprises budget. We are not cutting any services. There’s some things that will look new because we didn’t do them in this year, because they were really in the budget last year. They won’t be frozen (again) this year,” City Manager Mary Bunting said. “The effects of COVID-19 on our community were unprecedented.”
Bunting on Wednesday recommended a proposed $530 million spending plan to the City Council that calls for a modest 2.6% increase from the current plan. It sets aside about $232 million for operations, $236.5 million for schools and shuffles some 6.6% of the total budget for debt payments and schools’ capital projects. Debt service remains flat at $35 million.
The plan affords staffers a 3% wage increase this July — something also put on hold last cycle for six months, but the city made up for it with raises in January. Meanwhile, Hampton School employees are on tap to get 5% pay increases, bolstered by additional funding coming from Virginia’s new budget.
“I think they deserve it,” Bunting said. “I would have given a 5% (raise) if I could have. I just couldn’t with the revenues the way they were.”
Hampton rejiggered its compensation polices and pay scales by increasing minimums for certain entry-level roles to be more aligned with salaries around the region. Bunting also recommended wage increases on positions to offset adjustments made to entry-level salaries, offering $100 increase per year of service up to five years, or $500. Plus, Hampton plans to budget roughly a $1 million toward merit bonus for staffers and will launch the $11-an-hour state-mandated minimum wage increase early, months before it is due to go into effect next year.
The real estate tax rate will stay flat at $1.24 per $100 of assessed value and the personal property tax rate also stays level at $4.50 per $100 of assessed value.
Talk of adjusting the property tax rate to account for soaring housing assessments this year — average increase was 5% for most homeowners — has been tabled for now. Bunting said the city does not want to jeopardize anticipated money due to Hampton under the American Recuse Plan, a one-time infusion of funds of potentially up to $51 million over fiscal years 2022 and 2023, Bunting wrote in her budget summary.
A clause stipulates that states and territories may not use it to reduce tax rates and Hampton is not clear if that also applies to cities and so “we are awaiting further guidance from the U.S. Treasury Department
on how this provision will be administered,” she said.
Hampton did well in real estate, personal property taxes — which accounts for most of the city’s revenue — thanks to solid collection rates and projects those sources to continue show growth. The city also saw some major gains in sales tax, but income from critical sources such as commercial real estate, amusement, admissions and lodging income most affected by the pandemic, continues to lag.
“We don’t know whether we will ever get admissions tax revenue back fully or not. Other things like lodging, I think we will get back. It’s just a question of when people ... are fully vaccinated and feel like it’s safe for them to travel,” she said. “I feel very confident meals tax will eventually get back to where it was.”
Other items funded in this
cycle will cover $2.1 million for renovations to the downtown jail on High Court; $6.5 million for relocating the police firing range out of the Old Northampton neighborhood, $1.2 million to design a new 911 center. The budget also will continue to cover the increase in blight abatement funding that was included in the current budget.
Some fees would go up. Storm water fees are expected to rise to $10.83 a month, an annual $1 increase to fund Resilient Hampton projects. Beginning this fiscal cycle, 80% of those collected fees would be devoted to managing storm water issues outside Resilient Hampton pilot areas, to mitigating flooding in other neighborhoods. Public works officials said it planned to use some of its reserves to help with increases.
Bunting also touched on the personal toll the pandemic has had on Hampton, with as of Monday 9,852 residents who contracted the virus, with 164 of them that died, she said.
“This has been a challenging year for us, but what we’ve seen is innovation, accomplishment and out of the-box thinking to keep our city operations,” Mayor Donnie Tuck said afterward. “We did not lay off employees. What you do there is create more and more problems for families.”
Councilwoman Chris Snead added that it would have been great if the city could have given everyone 5% raises or lower the tax rate but understands why that wasn’t feasible now.
During most budget cycles, the city budget is available for public review at the libraries. The libraries, which had been open over the summer on a limited basis, went back to curbside services in the fall when COVID-19 cases spiked. That said, Hampton plans to reopen the libraries and community centers, also shut down during the pandemic, later this month.
In the meantime, copies of the Hampton’s fiscal year 2022 budget will be available on the city’s Budget Division website at this link by the end of the day Thursday. Public hearings will take place April 28 and May 5, with the council adoption on May 12. Answers to additional questions about the proposed budget are available by calling 757-727-6377.