THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, April 2, 1995 TAG: 9503310022
SECTION: COMMENTARY PAGE: J4 EDITION: FINAL
TYPE: Editorial
LENGTH: Medium: 60 lines
Portsmouth City Manager V. Wayne Orton proposes to expand the police force by 21 officers in fiscal 1995-96. But to do that and to set aside a half-million dollars for economic development and an additional $700,000 for the financial reserve, Mr. Orton suggests that City Council boost Portsmouth's real-estate tax rate from $1.32 per $100 of assessed value to $1.36, deny most employees pay raises, chop public-school funding, boost fees for water, building permits and admission to the Children's Museum of Virginia and the fee paid by businesses for storm-water management.
Mr. Orton's budget aims to ease Portsmouth's cash-flow pinch while enhancing public safety. City employees, homeowners and businesses would share the pain to attain these objectives. If City Council approves a 4-cent increase in the real-estate tax rate, Portsmouth's rate will still be a tad below Norfolk's.
Norfolk last raised its real-estate tax rate a few years ago, by a nickel to underwrite an enlarged Police Assisted Community Enforcement program. That move appears to have paid dividends: Crime rates in all categories except arson have declined.
Portsmouth's financial challenge is ever tough. A greater portion of Portsmouth's real property is exempt from taxation - because it is federal, state or municipal property - than Washington's. It's population, like Norfolk's, gets older and poorer. Demand for public services is high. It has trouble paying its bills, though pay them it does.
Which is to say that Portsmouth struggles much as do most other long-established central cities in Virginia and elsewhere. But the struggles of such cities in Virginia are needlessly hard because of unhelpful state policies that hobble them.
Virginia should enlarge localities' ability to finance essential services. Virginia's localities are compelled by state policy to rely too heavily on the real-estate tax for revenue. The burden on homeowners would be lighter if, for example, localities could levy a modest payroll tax. That would be a boon, not only to cities such as Norfolk and Portsmouth, to which people living in neighboring cities and counties flock to work, but also to fast-growing young cities such as Virginia Beach and Chesapeake, where businesses proliferate. But Virginia's policy does not permit a local payroll tax.
State political and business leaders have lately recognized that Virginia's constraints on localities - on its older cities, especially - impede economic growth of metropolitan areas to the detriment of the commonwealth. The search has begun for a state urban policy that would strengthen Virginia's hand in competing against North Carolina and other states for new businesses and investment.
North Carolina is markedly more successful with its economic-development efforts than Virginia, and that is attributable in large measure to its enlightened urban policy which provides cities with tools to further their prosperity.
Virginia must make some intelligent reforms or slip behind other states economically. The quest now under way has started late in the day. by CNB