Henrico zip code change drops city revenues

By Rachel DePompa - bio | email
Posted by Terry Alexander - email

RICHMOND, VA (WWBT) – Richmond leaders say Henrico County's zip code change is partially to blame for its budget woes. The city faces a 10 million dollar shortfall.

The city says its sales tax dollars are down 18 percent over the last 10 months and that figure is not entirely related to a sour economy. Some Henrico County residents now use Henrico instead of Richmond when they send and receive mail. That tiny change of address may be sending city revenues on a downward spiral.

"While we can't quantify it. I'll be the first to say sure there is an impact," said Marcus Jones, Richmond Deputy for Finance.

The city's Deputy for Finance has watched city sales tax revenues decline 18 percent. He can't tell you just how much it is because of the zip code change, but he and city council members are aware, this is money the city should get used to losing.

"This is not going to fix, this is going to be like this. We're going to have to deal with this going forward and we're going to have to calculate many fewer dollars in terms of our sales tax," said Richmond City Council President Kathy Graziano.

Chesterfield County is also considering a zip code change for 55,000 residents. Which means Richmond could soon take another hit.

"Everybody's trying to get all the money they can, I would think they would go forward with it and yes it would certainly have an impact on us," Graziano said.

The city's already had to trim 25 million dollars from its budget. Now it's facing another 10 million dollar shortfall.

"You just can't get 10 million dollar in terms of shutting lights off or shutting down computers," Jones said.

Which means tough choices are ahead at city hall.

"To what extent can we consolidate functions? To what extent can we out-source functions? To what extent are some functions that are being out-sourced, that maybe, we don't need to be in the business of doing them at all," said Jones.

The mayor has asked for a plan by mid- December to deal with the 10 million dollar shortfall. His administration says everything is on the table including services and jobs.

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