DATE: Tuesday, May 6, 1997                  TAG: 9705060269

SECTION: LOCAL                   PAGE: B1   EDITION: FINAL 

SOURCE: BY TONI GUAGENTI, STAFF WRITER 

DATELINE: VIRGINIA BEACH                    LENGTH:   89 lines

BEACH EXPECTS TAX ANSWER TODAY A $6 MILLION GAP REMAINS WHEN IT COMES TO SCHOOLS.

The money tug of war between the City Council and the School Board should come closer to ending today, and residents should know whether they'll face a tax increase.

Almost all City Council members said Monday during a special budget work session that following today's public hearing on the budget, they plan to hammer out how next year's operating and capital budgets will be spent - and, they said, they will decide whether that spending plan includes a real estate tax hike.

The final council vote to pass the budget is scheduled for next week.

The public's final chance to speak on the 1997-98 budget comes at 2 p.m. today, when council holds its second and last public hearing on the city's $956.9 million operating budget and $94.5 million capital budget. The operating budget pays for running the city on a daily basis, the capital budget outlines spending on big-ticket construction items.

The council has spent the last month struggling over a $422 million request from school officials to fund educational needs next year. The city said it can afford to spend only $409 million, leaving a $13 million gap. Even though school officials reduced their request two weeks ago to $415 million, city budget leaders have said the city can't afford that amount without a tax increase.

City leaders have been given 10 options to fund the school system's budget, ranging from $409 million to $422 million. Possible tax increases range up to 7 cents per $100 of assessed value, which the council two weeks ago decided was not an option when members limited themselves to a possible 3-cent hike.

Since then, council members have been trying to make sure education won't be affected if taxes aren't increased.

Their plates are full going into today's public hearing, having to contend not only with schools but also with the myriad other services provided by the city.

A recent informal survey conducted by The Virginian-Pilot shines a spotlight on the council's budget dilemma. More than 450 residents answered the survey, which asked people their top 10 priorities - 1 for the most important, 10 for the least - for city services. People were given 13 choices for schools, 16 for other city services.

Improving the city's libraries and reducing class size in public schools ranked at the top of residents' priorities in each list. At the bottom: Creating a surplus fund to give the School Board greater discretion over spending and bolstering Sandbridge's beach with sand.

But citizens' wishes don't always match their elected officials'.

School leaders told Mayor Meyera E. Oberndorf and City Manager James K. Spore during a special meeting Monday that the School Board needs a $4.2 million reserve fund for emergencies and $1.6 million to fund raises for teachers and other employees. Whether either or both will be funded is up to the council - and also is expected to be decided today.

Council members said after Monday's meeting that they still had unanswered questions about the school budget, including requests for positions and for the reserve fund. For example, there are 121 positions in this year's budget that were not filled, and an additional 197 positions have been requested for next year.

Several proposals in the new budget will account for these positions, Superintendent Timothy R. Jenney said - including expanding the magnet program, reducing elementary class sizes, and increasing vocational/technical education and special education programs.

One council member said the 121 positions had been requested and not filled so the unused money could go into a special reserve fund - which council members have said they are leery about creating for the School Board.

But school officials say they need such a fund.

``If you remove all flexibility and up revenue projections and recycle surplus funds, you have no room for movement,'' Jenney said. In that case, even a slight deviation in the budget, he said, ``and you're in big trouble.''

The Pilot's budget survey was published in the Beacon, the community news section for Virginia Beach residents, and was handed out April 17 at the council's first public hearing on the fiscal 1997-98 proposed budget.

People who responded to the informal survey showed how divided they can be over taxes and services. One person's top priority could be another's bottom of the barrel.

``I think taxes will probably have to be raised, and I see no problem with that,'' said Dixie Johnson, a retired school teacher from Kempsville who filled out a survey. ``People want good schools, they want libraries, they want roads without potholes, they want the (recreation) centers - that costs money,'' said Johnson, who didn't vote for keeping tax increases from rising on her survey.

On the other hand, Arthur H. von Steuben, also of Kempsville, said it is important to spend money on tourism to ``ease up the tax burden on ourselves; if we get the tourists here, we get the money.

``We can do more and not burden the local taxpayer.'' MEMO: Staff writer Aleta Payne contributed to this report.

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