Stoney proposes increased real estate, cigarette tax and utility hikes; budget would up funds for schools, roads, public housing

Tensions heat up over budget

RICHMOND, VA (WWBT) - As part of a budget that includes increased spending for schools, transportation, and infrastructure, Richmond Mayor Levar Stoney proposed a cigarette and real estate tax increase, Wednesday afternoon.

Stoney’s budget proposal includes an additional $18.5 million for Richmond Public Schools, $2.9 million for affordable housing and a nearly $1 million boost to GRTC’s funding, expanding routes to those “communities that need it the most.”

To help balance the numbers, a 50-cent tax on cigarettes was proposed, as well as returning the city’s real estate tax to the 2006 level of $1.29 per $100 of assessed value. The current real estate tax rate in the city is $1.20 per $100 of assessed value.

"I buy cigarettes every week, one pack every week or so…That's wrong. Taxing people for no reason,” Jamar Alexander said.

"It is good because people are going to stop smoking. It’s good for health,” said store clerk Mohammed Tariq.

The tax increases are expected to raise more than $24 million combined.

But city council members already opposed to the hikes argue that Richmond already has the highest real estate tax rate in the area, compared to Chesterfield, Henrico and Hanover.

Stoney also proposed a utility hike, bumping natural gas 3.5 percent and water 4 percent, which would go into effect July 1st. Stoney’s administration estimates the increase would amount to $5.82 per month, on average, for residents.

Stoney also plans to direct $16.2 million to fixing roads and sidewalks. He called it an “historic investment.”

The mayor defended the tax and rate hikes, saying the cost of doing business as a city government is going up, “adding additional burdens to our already tight budget.”

Stoney said health insurance and retirement benefits for city employees is increasing by $3 million. The city’s state mandated salary increase for certain employees will cost an additional $900,000. Medical care and food for inmates at the city jail is also going up by an additional $1.2 million. Stoney also said Public Works Department costs are also increasing by $1.2 million.

“After crunching the numbers, it’s clear that our net $12 million in revenue growth barely covers the nearly $10 million we face in rising costs from non-discretionary obligations,” he said.

In a press release, Stoney said the budget was an “opportunity to invest in our children, our families and our neighborhoods.”

They mayor also gave a 3 percent cost of living adjustment for employees- the first in 15 years. Police, fire and first responders would also receive their planned salary step-increases. Starting pay for police officers would also be increased to $43,000.

“For the third straight year, we will follow through on the commitment we’ve made to the men and women who put their lives on the line each and every day,” said Stoney. “We can no longer treat employee compensation as an afterthought.”

RPS released a statement praising Stoney’s proposal as fully funding all of its requests, including $284,000 for school crossing guards program and $373,000 for transportation for after-school programs.

“With $18 million in additional operating revenue, we will be able to achieve our two main goals for the coming year: fully fund a raise for our teachers and all other RPS staff, and fully fund the second year of Dreams4RPS, our strategic plan,” RPS said in a release. "We thank the Mayor for his courageous leadership in putting this budget on the table, and we look forward to working with the City Council to now make it a reality. Our children deserve nothing less and the time to act is now.”

"Well that’s good. They deserve it. They deserve more,” said retired teacher Julia Flowers.

Here is a look at the major proposals contained in the budget:

  • Real estate tax increase from $1.20 per $100 assessed value to $1.29
  • 50-cent per pack cigarette tax increase
  • $18.5 million for RPS strategic plan, including salary increases for teachers and support staff
  • $16.2 million for streets and sidewalks
  • $10 million to restore bridges
  • $2.9 million for the Affordable Housing Trust Fund
  • $965,000 for expanded GRTC service
  • $485,000 for Richmond Eviction Diversity Program
  • Scheduled pay increases for police and firefighters, and starting pay elevated to $43,000
  • 3 percent cost of living adjustment for city employees- the first in 15 years

After the Stoney finished his speech, Councilwoman Reva Trammell blasted the tax hikes, telling the mayor, “I hope to God this is your last laugh.”

“Mayor, you said that you were not going to raise taxes when you ran for mayor. How can you stand up here before all of us and do this to the people?” Trammell said.

“You can laugh all you want, but I’ll tell you right now... you won’t be laughing much longer because this is not funny what you’re doing to the people. You talk about the poor people... Why don’t you come out there and see them struggling to try to pay these real estate taxes, to try to pay these utilities."

The mayor did not respond to the comment.

Watch the full exchange below:

Richmond City Council heated meeting exchange

Councilwoman Kim Gray said that the city should look to tightening its belt first, before making cuts.

“We have audits, we have comparative analysis... paperwork... that shows us we’re overspending in several departments," said Gray. "So, I’d like to see us do some of the hard work of reducing our budget before we start proposing these enormous tax increases.”

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