The first Charlottesville budget proposal, presented Monday by interim city manager Michael C. Rogers, is significantly larger than the current year and recent years’ budgets as the city rides a wave of increasing revenue.
The proposed budget for fiscal year 2023 totals $198,783,884, which is $22,858,630 or 13% more than the current Fiscal Year 2022 budget.
“I would be remiss if I failed to note that we are still moving through a global pandemic. However I am pleased to note that we are seeing a marked improvement in revenues from sales, meals and lodging tax collections,” Rogers wrote in his letter to City Council.
According to Rogers, sales tax income is up 8.33% while meals and lodging taxes are up 19.3% and 30% respectively.
City departments submitted a total of $94.4 million in base budget requests for the next fiscal year, 7.4% more than fiscal year 2022’s adopted departmental budgets. Unlike years past years, there were no restrictions on department budget submission this budget cycle.
In addition to the base budgets, departments submitted $10.7 million in new requests and $1.05 million was added to the proposal to fund seven new full-time positions to help fill needs in key areas including Neighborhood Development Services, Human Resources and Public Works.
The proposed budget keeps the city’s real estate tax rate at 95 cents per 100 dollars of assessed value. Even so, real estate tax income will rise about $8.3 million, based on the current rate, due to increases in real estate property assessments. If City Council decides to move forward with a a proposed 10-cent tax increase, $9.2 million additional dollars would be available for added expenditures. That amount is included in the budget but is unallocated because the City Council has not decided whether to raise the real estate tax rate or by how much.
In February, councilors agreed to legally advertise a potential 10-cent tax for every $100 of assessed value, but are conflicted on whether the rate should be that high.
“There are a number of decisions for Council to make, the school reconfiguration project being one as well as investments in affordable housing and other priorities that they have identified. And so Council will have the option of drawing on up to 10 cents of additional revenue as they grapple with some very challenging decisions,” Rogers said during a media briefing held prior to Monday’s City Council meeting.
The council will discuss the budget proposal at a series of work sessions that begin Thursday. The first budget and tax rate public hearing will be March 21 and the second one will be April 4. The council is set to vote on the budget April 12. The fiscal year begins July 1.
The proposed budget fully funds Charlottesville City Schools’ $62,925,964 funding request, which is a 6.7% increase from the current year. The proposed capital improvement program budget includes additional funds for the proposed renovation and expansion of Buford Middle School, formally known as reconfiguration.
Rogers emphasized that the reconfiguration funding decision lies in the hands of City Council and is not fully funded in the current proposed budget.
“Whether it’s the full $75 million or or some portion of it, it’s the Council’s decision and the only way that that could be done is through an increase in the property tax rates as proposed,” Rogers said.
Krisy Hammill, senior budget analyst for the city, said the current capital improvement budget, which includes the Buford project, is not affordable. That’s typical, she said, noting that sometimes City Council has to cut some projects. What’s not typical is the estimated $75 million price tag for Buford as opposed to other projects, Hammill said.
Hammill said the entire capital program is generally in the $70 to $80 million range each year.
“The difference with the school reconfiguration project, and why the tax increase is being pushed forward, is that we’re dumping in $75 million all at one time. There’s not the benefit of time in either paying off older debt or managing other projects and moving them around. It’s putting in a whole bunch of dollars at once that’s creating the need for the tax increase,” Hammill said.
When asked, Rogers and Hammill declined to provide a list of which projects city staff would recommend cutting in order to fund reconfiguration.
The police department budget also saw an increase of over $1.3 million, despite calls from the community to decrease the police department budget and put more funding towards mental health and risk reduction services. Hammill said the budget does fund similar programs previously funded but adds no new ones. The increase includes a 7.1% raise in salary expenditures.
Last year, community members and councilors, including current Mayor Lloyd Snook, were vocally critical of a lack of transparency or line item budget from the police department.
“In terms of transparency, we are rolling out a visualization that will be live on Tuesday morning. That will allow you or the public to go to any department within the city and do a line item budget comparison from [Fiscal Year] 22 to 23,” Hammill said.