Metro localities' spending to fall 3%

MORE:

• Metro localities' spending to fall 3%

• Tri-Cities-area budgets also will take hits


BUDGET FIGURES:

• Richmond and surrounding counties

• Tri-Cities area

Total spending on local government services and schools in Richmond and its suburbs will fall nearly 3 percent during the fiscal year beginning July 1, a Richmond Times-Dispatch review has found.

Local officials say they can hold the line without significant cuts in services to residents -- basically by not approving the usual 3 percent to 4 percent pay raises government workers have counted on in recent years, as well as by cutting office expenses and holding off hiring to replace employees who left this year.

One of the top sources of money -- real estate tax collections -- is falling as home sales slump. Local governments have been hit hard by deep cuts in their other big source, state aid, as Gov. Timothy M. Kaine and the General Assembly struggled to balance Virginia's budget.

"Real estate, sales taxes, the state -- we've been hit from all angles in this budget," said Richmond Mayor Dwight C. Jones, echoing comments from many local officials.

"The recession finally found us in Richmond."

The Times-Dispatch review found a projected regionwide drop of 2 percent in what is now local governments' biggest source of money -- real estate tax collections. Falling property values bit deepest in the city of Richmond, which projects a nearly 9 percent drop in collections.

Payments from the state, the second-biggest source of money for local governments' and schools' general fund budgets, are down about 6 percent, according to local government budget figures.

Other local taxes -- personal-property taxes on cars, utility taxes, business and machinery taxes -- are projected to fall 5 percent, the budgets show. Sharp drops in the values of sport utility vehicles and pickup trucks are the main reason, officials say.

Despite the pressure of reduced revenue, Richmond's Jones is proposing the biggest construction project in the area: the new jail that local leaders have long said was needed and long did nothing to fund. With Jones' proposed $138 million-plus facility would come a slew of programs meant as alternatives for nonviolent offenders awaiting trial on minor charges or suffering from mental illness. That would reduce the number of jail beds needed.

"This is a difficult time, but we need to be poised to move when times are better," Jones said. "It is unconscionable to have a jail like this, that is inhumane, and to have had it for so long. And on my watch we're going to fix it."

Jones also tried to hold the line on human services, with no cuts in the city's payment to the Richmond Behavioral Health Authority, a community mental-health agency with one of the biggest and neediest caseloads of people with mental illness in the state. His budget includes a 10 percent increase in city funding for social-services programs that partly offsets the 8 percent cut city officials expect in state funding of those programs, such as welfare for families with dependent children, child-abuse prevention and programs for the aged.

Henrico County, meanwhile, has deferred a number of big construction projects until the economy improves. Although County Manager Virgil R. Hazelett's proposal sparked a blast from School Board Chairman John W. Montgomery Jr., Henrico is the only Richmond-area local government that is increasing its contribution to school operations. School spending across the region is down, reflecting cutbacks in state funding.

"Education and public safety are top priorities," Hazelett said.

While he proposed increasing operating funds for the schools, Hazelett said he is worried about taking on new debt next year to build major projects because the recession is cutting county tax revenue, which may continue for some time. A big increase in debt service, if revenues fall, could mean cuts in spending on services.

Henrico also bucked the general trend by increasing funding for mental-health services. It is one of the few areas the state isn't cutting, after launching several initiatives in the wake of the Virginia Tech massacre in April 2007, committed by a student who had been ordered to get mental-health care but whose case was not followed up by the local mental-health agency or by Tech officials.

Henrico's total spending will rise slightly -- by just under 1 percent -- mainly because its real estate tax collections are less badly squeezed than other localities. In part, that is because Henrico started recognizing the real estate slump in assessments last year, so the latest declines there aren't as marked as in other places.

Also, the county is now collecting $8 million in taxes from Short Pump Town Center. For the past five years, that money was reserved to pay for new roads, traffic signals, storm drainage and lighting for the project.

Except for Henrico, other localities are cutting spending.

Hanover County proposed the deepest cuts in overall spending, as well as in administrative spending -- the overhead of government.

"The service impact is on the margins" and will likely be difficult for residents to see, said County Administrator Cecil "Rhu" Harris Jr.

Some employees in county offices will pick up new tasks, he said, so the county can leave vacant positions unfilled. Three of the five sheriff's deputy and firefighter slots Hanover hoped to fill this year will be left vacant next year.

Richmond is cutting its budget by 5 percent, including a 5 percent cut in police spending, which grew 40 percent during L. Douglas Wilder's tenure as mayor. The new police budget eliminates 19 civilian support positions as well as money for furniture, conferences and conventions.

The parks department will see a steeper 7 percent cut, mainly because the city will not fill 29 vacant positions. The library system faces a still-steeper 10 percent cut that will come from shorter hours that will cost four full-time slots at the Main Library.

Richmond is cutting its contribution to the school system by 4 percent, which with state cutbacks leaves the system with an overall spending cut of 3 percent.

Chesterfield County and Hanover are cutting local government funding of schools by 4 percent and 1 percent, respectively.

Matt Harris, Chesterfield's senior budget analyst, said one reason the decline for next year seems larger is that this year's figure includes a one-time use of $4 million of reserves. He said "the county has worked diligently to preserve funding for schools."

Harris said county officials worked hard to preserve such core services as public safety, with supervisors last week adding funds so that spending for police, fire, the sheriff's office, animal control and emergency services will decline less than 2 percent.

Contact David Ress at (804) 649-6051 or dress@timesdispatch.com.