WAVY.com

Jail relocation, no real estate tax rate decrease in Portsmouth’s proposed FY24 budget

PORTSMOUTH, Va. (WAVY) — A lowered tax rate to offset significant increases in real estate assessments citywide isn’t included in Portsmouth’s proposed fiscal year 2024 budget, but the city is planning a small increase in personal property relief.

The budget, which was officially released on Monday, also includes more than $56 million budgeted to finally move the city’s waterfront jail. City leaders have tried for years to relocate the jail and other tax-exempt property on the waterfront, highlighted by a multiyear legal battle over the jail that ended in 2021.


In the FY24 budget, the city’s tax rate will stay at $1.30 per $100 assessed value, the highest rate in Hampton Roads, with the city estimating current and delinquent taxes to generate $123.3 million in revenue. That’s a $10,557,165, or a roughly 9% increase in revenue from 2023, the city projects.

The budget cites Portsmouth having the highest percentage of tax-exempt property in the state (41%) in the city’s decision to keep the tax rate the same. It’s unclear if City Council will opt to change the tax rate from Interim City Manager Mimi Terry’s recommendations (or offer some other form of relief), but they will hold two public hearings in April (April 11 and April 25) to discuss the budget. The April 25 hearing specifically mentions the tax rate.

Citizens have already voiced their concerns about the increased assessments (which jumped above 40% compared to last year for some homeowners) earlier this month in front of city council. That’s when council officially moved to fire former City Assessor Patrick Dorris, who suggested a real estate tax rate around $1.17 as relief for citizens due to the jump in assessments.

In the meantime, the city manager is proposing a 5% increase in personal property tax relief, up to 50% off the assessed value of vehicles for the first $20,000 of value proposed. Last year’s discount was 45%.

Other highlights in the budget include nearly $85 million for a new public facilities master plan (page 286), that includes a public safety complex for police and the fire department that “consolidates operations in a centralized location and opens our downtown area for redevelopment” and $33.5 million to replace water and wastewater utilities in Downtown, which have an average age of about 100 years, the city says.

The city says it’s also monitoring revenue trends with the new Rivers Casino Portsmouth, which they say “will enable the city to cash fund capital projects rather than increase debt, provide a relief in reduction of various tax rates for our citizens, increase city programs, employee recruiting and retention, education, and to continue to provide core services for our communities.”

The city has budgeted a “conservative estimate of $9 million” in expected tax revenue with the FY24 budget, “providing a buffer for a short term decline in receipts over the first
few years before annual growth begins.”

The city though expects about $16 million in local tax revenue with the casino for 2023, with that number going down to about $10 million in 2025 “before stabilizing and exhibiting annual growth.”

Portsmouth is also proposing a 5% general wage increase for full and part-time city employees, and a local contribution of $64 million to Portsmouth Public Schools.

You can review the full budget here. There’s also a video summary.