Chesapeake’s $1.6 billion proposed budget includes pay raises, reverts real estate tax back to prior rate
Chesapeake’s nearly $1.6 billion proposed operating budget for the upcoming year includes pay raises for employees and the expiration of a temporary real estate tax rate deduction enacted last year.
City Manager Christopher Price and Budget Director Jonathan Hobbs presented the proposed spending plan to City Council members last week during a work session. Residents have the opportunity to weigh in on the budget throughout April during upcoming work sessions ahead of the regular council meetings.
The proposed budget is 5%, or $75 million, bigger than the previous year’s budget. The total gross budget is $2.1 billion, but transfers between the city’s and school system’s operating budgets as well as internal service funds, such as technology charges, are subtracted from that total to get the operating budget amount.
The proposed budget doesn’t include any new fees, but homeowners will see higher tax bills because of a nearly 9% increase in real estate assessments citywide. Last year, City Council voted to decrease the real estate tax rate by 4 cents for one year in order to offset a more than 13% assessment value increase. For the 2024 fiscal year, which begins July 1, the budget resets the tax rate back to $1.05 per $100 of assessed value, where it’s been set since 2009. Real estate taxes are expected to bring in almost $389 million in revenue for the city in fiscal 2024, an additional $47.5 million over last year.
Hobbs said “historically low” interest rates for homes over the last year played a role in the increased assessment values.
Last year, the Chesapeake City Council raised the city’s meal tax rate and vehicle license fee by 0.5% and $3, respectively. Those combined increases were projected to add $3.5 million to the budget, which helped the city implement pay raises and adjustments for public safety officers. To build on that, this year’s budget includes nearly $4 million for a classification and compensation study for public safety workers.
Additionally, $7 million will help provide a 5% general wage increase for city employees.
Personal property tax assessments are still being finalized, but collections are anticipated to decrease by nearly $4 million. Budget documents attribute the decrease to falling vehicle assessments as well as growth in several tax relief programs. But other sources of tax revenue, such as meals and sales, are expected to help offset that decrease.
The capital improvement plan is plagued by unprecedented inflation, Hobbs said, which will increase the cost of all projects. A total of $1 billion will fund the plan until 2028, with $556.7 million allocated in 2024. Several projects will get some city funding in the proposed budget, including $4 million for technology infrastructure modernization that will revamp the city’s tax system and allow residents to more easily interact with the treasurer’s office, for example.
About $2.2 million will be allocated for enhanced stormwater maintenance. Price said the city operates a massive system with hundreds of miles of ditches, ponds and canals but that the city is “nowhere near” best practices for maintenance.
City staff also reallocated job positions throughout various departments to help with vacancies and increase staffing for facilities such as the Cornland School and Historic Village site.
The budget also allocates $11 million to fully fund the city’s first public pool at the Clarence V. Cuffee Center. Last year, the city received $9 million in state funding. This year the city is allocating an additional $8 million, alongside another $3 million in federal funding for the project.
A handful of other projects are on City Council’s radar but have no funding allocated at this time, including facilities for convocations, aquatics and performing arts.
Hobbs also said the city will have about $7.6 million in remaining federal pandemic aid to allocate for the budget.
Natalie Anderson, 757-732-1133, natalie.anderson@virginiamedia.com
