Minutes 06/08/1965 - Laserfiche WebLink

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18 June 8th, 1965 In the preparation of this budget each municipal function was carefully reviewed a§ to Past and present fiscal experience before any increase in appropriation was allowed. Strict attention was also oaid to resources available to finance the costs involved. It was apparent during reviews that denartmental requests would raise costs of city government in Portsmouth by an amount w~ich was disproportionate_to ~evenue sources that included a sales tax. It was necessary for some $1,184,59] worth of departmental requests to be eliminated from the General and Capital Funds. Even with this amount eliminated the proposed budget is increased by $1,260,725 over the current budget. These increases will be discussed in the second part of this message with an explanation of revenues in the first part. Part I. Revenue estimates for 1965-66 amount to $16,857,381. These estimates exceed 1964-65 revenues by $1,251,857 even though there is estimated from the sales tax the amount of $1,900,000. !~hile the sales tax revenue shows a substantially larger amount than the increase in the budget, this is explained by the reduction of $575,000 from the amount of funds being taken from the Water Fund and a S275,000 non-recurring item in the 1964-65 budget from highway funds. These revenue estimates also take into consideration the elimination of the household personal property tax which amounts to approximately $540,000. It is believed that the elimination of the household property tax is a forward step and in line with action taken in other cities in Virginia. This tax cannot be fairly assessed and is difficult to collect as it is assessed in January but not due and payable until November. While many cities in Virginia have a higher tax rate on personal property, only Portsmouth has a lower rate than the real estate tax rate. These revenue estimates anticipate amending the personal property tax rate to $5, the same as the real estate rate. The City Council has already taken action to accomplish this by amending the tax ordinance when the sales tax ordinance ~as adopted. In reviewing our revenue sources, the real estate tax rate, business and professional licenses, other taxes and service charges were stud~ed and it is found that Portsmouth is comparable to other Virginia cities, particularly the cities in Tidewater. It was concluded that the city could or should not get too far out of line with the surrounding area in its cha~ges; therefore, this leaves the sales tax as the only available source for additional revenue and is estimated in this budget at $1,900,000. The revenue estimates that have any adjustments of any substantial amount are as follows: Real Estate $ 160,000 plus in building construction. This is an adjustment in Public Service Corporations and normal increase Personal Property 550,000 minus adjustment above of Public Service taxes. This reflects the elimination of household personal property and Sales Tax $1,900,000 plus Based on a 2% tax with a $4 limit, the same as the City of Norfolk. Public Assistance Grants $ 227,617 plus the increase in reflected in expenses. These are funds received from the Federal and State governments and School - General Appropriation $ 124,000 plus Additional funds estimated to be received from State for school operation. Public Law 874 - Schools S 80,000 minus It is estimated that the City will receive this much less from the Federal Government. Transfer from ~ater Fund $ 575,000 minus expansion. but have not been dealt with here. More funds are being left in the Water 'Fund to pay for current capital There are many other minor revenue items that wilt~ show fluctuations Part II largely in the following: The appropriations show ,an increase of $1,260,723 which is reflected Schools $ 558,374 Health Department 24,468 Police ;57,574 Fire 83,305 Social Service 190,733 Debt Service 77,625 The proposed school budget provides for an increase to all personnel