News Flash

* Hampton City News

Posted on: May 13, 2021

Budget set for next fiscal year; tax rates stable but 2 fee increases

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May 12, 2021 - City Council on Wednesday passed a budget for fiscal year 2022, which begins July 1, that keeps the property and car tax rates flat but increases the stormwater fee for flooding and pollution reduction and the wastewater fee for maintenance.

While the proposed $530,279,092 is an increase of only 2.6%, it will actually accomplish many of the citizen's and Council’s top priorities. overall. That’s largely because many of those projects were technically in the current budget (fiscal year 2021) but frozen due to the risk of revenue loss from the pandemic.

That $530 million is almost evenly split between city operations (42.8%) and school operations (44.6%), with an additional 6.6% for debt payments for city and school capital projects. Transfers – some internally to capital projects and some which the City collects on behalf of other entities – account for the remaining 5%.

After the votes, Mayor Donnie Tuck noted that the city budget showed Hampton's priorities, including extra funding for schools above the state requirement, as well as public safety and good governance. The fact that an economic development prospect recently praised the high school academies, he said, "shows that the investment we're making in our schools is showing dividends."

"We are an old city," said Tuck. "We are landlocked. Yet we are doing the things strategically that make companies want to come here."

Although the tax rate didn't increase, home assessments generally did, with the majority of homeowners seeing increases of 5% or less, making the median increase due to home value about  $10.44 per month more.

Bunting noted that the increases in revenues from the increased home assessments are offset by other revenue declines, with the city seeing a 6% drop in revenue due to decreases in commercial assessments, meals taxes, hotel taxes, amusement taxes, interest income, and more. 

Even with that, Bunting noted that she likely would be recommending a tax rate reduction if it were not for a provision in the new round of federal funding for Covid relief, called the American Rescue Plan. The federal money comes with a clause saying that states and territories may not use it to reduce tax rates. Those funds could bring the city $48.5 million over the next two years.

Key items in the budget proposal include: 

  • Salary increases commensurate with other localities’ increases to provide a competitive wage for employees; in addition, this budget will add targeted salary adjustments in specific jobs where we have fallen behind the market, will make compression adjustments, and will  implement the state's new minimum wage rate of $11 per hour.
  • Recurring and one-time increases for Hampton City Schools, which will facilitate teacher and employee raises, as well as pay scale adjustments, and support the transformational College and Career Academy program.
  • Increases to fight crime, including new positions for the Police Division and additional funds for enhanced public-safety street lighting and surveillance systems.
  • Investments in our housing stock.
  • Investments in our Family Resilience and Economic Empowerment initiatives , such as the youth employment program and workforce development. In the long run, these measures are also designed to get at the roots of some of our youth violence by providing job training and other skills to our young people.
  • Investments in additional neighborhood projects to help reduce flooding and pollution by such things as realigning ditches and improving retention ponds, and begins to hep fund major resilience projects through the stormwater fee.
  • Improvements to the city's aging sanitary sewer system through the wastewater fee. 
  • You can view the Manager’s Recommended Budget at www.hampton.gov/budget. The adopted budget will be posted by July 1.

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