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259
<br />
<br />April 28, 1981
<br />
<br />As an alternative to the increase in the machinery and tool tax we offer the following:
<br />
<br /> Since the proposed increase in machinery and tool tax would only generate $117,000
<br />in additional revenue we recommend that the proposed .05 increase in the tobacco tax
<br />be doubled to 10¢. This increase would produce $425,000 in additional revenue or $308,00
<br />more than the proposed increase in the machinery and tool tax.
<br />
<br /> The revenue generated by the additional .05 on tobacco could offset part of the
<br />proposed increase in real estate taxes.
<br />
<br /> The total revenue generated by a combination of a .05
<br />and an additional .0S in tobacco would amount to $1,498,000
<br />$1,452,000 that would result from the proposed .50 increase
<br />the .07 increase in real estate and the .05 in the tobacco tax.
<br />
<br />increase in real estate tax
<br />or S46,000 over and above the
<br />in machinery and tool tax,
<br />
<br /> Therefore, we recommend that the increase in real estate tax be limited to .05 per $100.0
<br />of assessed value rather than the .07 as proposed.
<br />
<br /> We also recommend that the additional revenue recommended by our proposal be applied to
<br />either charges billed the School System for increased water and sewer rates, or to the Public
<br />Utilities Maintenance Fund to aid the conservation of wa~er within the Portsmouth system by
<br />increased maintenance on leaking lines and connections within the city.
<br />
<br /> You will hear, probably here to night, that an increase in the tobacco tax will cause
<br />a large loss in retail sales, that Virginia is one of only seven states where municipal cigare
<br />taxes are levied, that only two localities in the nation outside Virginia impose as much as 10
<br />cents on cigarettes and other statistics· What you will not hear is that Virginia is still
<br />among the lowest of the 48 states on direct consumer costs for a package of cigarettes because
<br />the states tax cigarettes rather than the municipalieies in most states. ~hat here in Ports-
<br />mouth, as well as other Tidewater cities cigarettes can be bought for as low as 505 and as
<br />high as 95~. That the difference is excessive mark up over cost and the convenience the in-
<br />dividual pays for depending on the location of purchase. For those of us that travel, and
<br />smoke, as I do, I can assure you that even with the increased tax Virginia cigarettes will be
<br />comparable to most areas, and still below many.
<br />
<br /> Certainly the alternative to raising the tax on cigarettes is far less desirable and will
<br />hays a greater impact on Portsmouth.
<br />
<br /> The Chamber also wishes to address briefly the quality of life factors that impact on
<br />the community, and, in particular, our system of public education. The importance of a qualit
<br />school system to the further development of our city cannot be overstated. We applaud the
<br />level of support provided public education by the City of Portsmouth over the years, and con-
<br />cur that state funding for mandated programs is the crux of budget problems facing the Ports-
<br />mouth Public Schools. Again, the Chamber concurs with the City Manager that, "the failure
<br />of the State to adequately fund school systems"must be addressed and we recommend:
<br />
<br />1. That all available remedies against the State of Virginia for failure to provide
<br /> proper funding be immediately pursued.
<br />
<br />That compensation of all municipal personnel be adjusted as near as possible
<br />to compensate for inflation within the capabilities of the budget, and further,
<br />that any compensation offered be on a parity basis for all city employees.
<br />
<br />That an impartial commission of individuals not associatbd with the city budgeting
<br />process, or the School Board budgeting process be appointed immediately to study
<br />the School Board and City budgets on a short term basis with a view toward
<br />resolving current variances in budget priorities and funding of essential servizes
<br />for both the City and School Board for the coming fiscal year, and to report its
<br />recommendations to the City Council.
<br />
<br />That the City and School Board engaged the services of a private consultant following
<br />the resolution of the 1981-82 budget to serve with the commission to analyze the fund
<br />lng of programs and services and to make long term recommendations for the fiscal
<br />needs of Portsmouth.
<br />
<br /> The Chamber stands ready to nominate members from the business community that have the
<br />requisite skills in budgeting, planning and management to serve on t~e commission. We are
<br />confident that with the full coooperation of the City and School Board that such a commission
<br />would make its recommendations to the Council in a timely manner so as not to impede the bud-
<br />get decision process.
<br />
<br /> Again, our services as an economic development entity in Portsmouth are available to the
<br />City and to you as a Council, as we strive as a community to improve our economic posture .
<br />while providing a satisfactory level of programs and services that will enhance our future
<br />growth and development.
<br />
<br />of
<br />
<br /> Finally, we note a resolution on your agenda this evening urging funding by the Congress
<br />payments to local governments in lieu of property taxes on property owned by the Federal
<br />government. ~The Chamber has been on record ~n support of such legislation since May of 1980.
<br />Again, we offer our full support in working with you toward a viable resolution of this cr~cia
<br />issue."
<br />
<br />J. Stanley Livesax,
<br /> the cigarette tax
<br /> Page H. Sutherland,
<br />
<br /> Jr., 301 Columbia Street, spoke in opposition to the increase of
<br /> rate. Exec.
<br /> S407 Patterson Avenue, Richmond, Va.,/Vice-President of the Tobacco
<br /> Tax Council, spoke in opposition of the increase of the cigarette tax rate.
<br />Julian F. Carper, 3S15 ~. Broad Street, Richmcnd, Fa., President, Firginia State AFL-CIO,
<br />
<br />
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