Norfolk council approves real-estate tax hike, millions more for schools

May 23--NORFOLK -- Taxes are going up.

On Tuesday night, the City Council approved a $1.3 billion budget proposal for the next fiscal year on a 6-2 vote.

Councilmen Paul Riddick and Tommy Smigiel dissented because of concerns over a 10-cent real estate tax increase, which they had voiced for several weeks .

"I'm worried about residents who are on a shoe-string budget or my elderly constituents on a fixed income," Smigiel said.

The budget also increases many fees and adds 10 cents in taxes on every pack of cigarettes and $1 more per night on hotel stays.

All will go into effect July 1.

What the city gets for all that: $23 million in new revenues that will go toward schools, raises for city employees, combating sea level rise, programs for the residents of the St. Paul's area and new vehicles and computers.

Growing debt payments, retirement costs and insurance expenses also weighed on the city's budget this year. The approved budget also includes cuts to 82 city jobs.

The city's first real estate tax hike in five years will bring the rate to $1.25 per $100 of assessed value. The average Norfolk homeowner will pay an additional $252 annually.

The increases on the cigarette and hotel bed taxes were not included in City Manager Doug Smith's original proposal. Those were added a couple of weeks ago, as the council worked out ways to save a handful of well-loved programs.

The council also unanimously approved a brand new school funding formula, aimed at making the schools' share of the annual budget predictable and objective -- and to help stave off the annual budget battle between the schools and the city. That was on full display at this year's budget public hearing, when teachers and schools advocates flooded the auditorium at Granby High School and spoke for hours about the need for additional education funding.

The formula sets the local funding rate at 29.55 percent of the city's income, which this year amounts to nearly $123 million. That's the city's portion -- this year, state and federal funding will round out an expected $328.5 million schools budget.

Since it's a percentage, the schools allocation will go up and down every year based on how much the city brings in.

Cities including Chesapeake and Virginia Beach already have such funding formulas in place.

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