Minutes 03/30/1999 - Laserfiche WebLink

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March 30, 1999 The proposed operating budget for fiscal year 1999-2000 is another in a series of priority-setting tools developed by staff for the consideration of the City Council. Other budget proposals before Council at this time are the Capital Improvement Plan (CIP) and Community Development Block Grant (CDBG) plan. All of these budgeting tools have been crafted with a common focus on the journey to higher performance. BUILDING CAPACITY FOR THE FUTURE An operating budget must be developed within the reality of the strengths, weaknesses, opportunities and constraints of the community which it serves. Portsmouth is blessed with many strengths; it is a historic seaport city with a rich background and strong ties to the federal government, particularly the Navy and Coast Guard. Because of this strong military presence, Portsmouth has more jobs than residents in the workforce, meaning that many thousands of people commute to Portsmouth to work each day. But this same federal presence contributes to a large percentage -- 55.4% -- of the city's real estate to be in a non-taxable status, placing an additional burden on taxable property in the city. Adding to this dilemma is the fact that several of Portsmouth's other major employers are also tax exempt, most notably the state-owned Portsmouth Marine Terminal and the non-profit Maryview Medical Center. The city is making a case, along with Norfolk and Newport News, that the state should share its port revenue with the host cities, and we will continue that dialogue in the next General Assembly. The problem of tax-exempt property is magnified by the fact that Virginia cities are tightly controlled under the Dillon rule by the state government, which retains for itself the more progressive, income-based tax sources and relegates to the cities the more regressive, property-based sources. While the state enjoys record surpluses brought on by a robust national economy, Portsmouth like most Virginia cities struggles to make its budgetary ends meet using taxing methods of the previous century. In addition to the large amount of tax-exempt property, Portsmouth is an older central city surrounded by other cities, meaning that future growth by annexation is out of the question. Along with other core cities throughout the country, Portsmouth has a much larger share of people who need government services beyond their ability to pay for them: the Iow income, the aged, the very young, and the disabled. During the 90s, Portsmouth has seen a steady but small decline in population in general and in public school population in particular. [Figure 2] The school population decline is particularly significant, since state support for local school districts is directly tied to the head count of students. 125,000 100,000 75,000 50,000 25,000 Figure 2: Population and Enrollment Trends 20,000 17,500 15,000 12,500 10,000 7,500 5,000 2,500 1993 1994 1995 1996 1997 1998 1999 2000 I ~ Enrollment ~'~Populaton I Given its other limitations, Portsmouth had many financial difficulties in the early 90s because of the recession in the national economy. These financial difficulties caused the city to operate within tight fiscal constraints for the first half of this decade, causing the city to fall behind the marketplace in compensating its work force and in replacing aging infrastructure, equipment, vehicles and technology. The result is a considerable backlog. While we are currently identifying and addressing that backlog, it is of such a magnitude that we cannot eliminate it in a single fiscal year.