THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, March 19, 1995 TAG: 9503190049
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY ELIZABETH THIEL AND KAREN WEINTRAUB, STAFF WRITERS
DATELINE: VIRGINIA BEACH LENGTH: Long : 133 lines
WHERE THE MONEY WOULD COME FROM 1. Higher taxes 2. Tough cuts to city spending, such as reducing employee salary increases and infrastructure maintenance
HOW THE MONEY WOULD BE SPENT 1. A salary increase for teachers and staff 2. A second campus for an alternative school 3. A magnet school for gifted students 4. Larger bus fleet to correct Princess Anne Middle School's scheduling problems
The School Board is about to approve a budget that is at least $15 million more than the city planned to spend.
The City Council, which already was expected to pass a modest tax increase for next year, doesn't have the extra cash.
``It's not rocket science to figure out that city revenue is not increasing in those proportions,'' said E. Dean Block, the city's director of management and budget. ``And it may pose some difficult choices for the city manager and City Council.''
The tradeoffs, to be negotiated over the next two months, will be tough for both sides.
The council could cut city spending to make room for the school system's budget, or could raise taxes, risking the ire of tax-weary citizens. Or, it could deny the schools' increase, inviting charges that council members are eroding the high-quality education that makes the city a popular place to live.
The School Board will vote on its proposed budget Tuesday. If its $362.2 million budget is not approved by the council, the School Board would have to take another look at its priorities and decide what to eliminate.
Most school districts and councils in the state are facing the same choices. School boards lack the power to levy their own taxes, so they rely on their local governments to fill budget requests. Government leaders don't want to hurt education, but they get blamed if local taxes go up.
In Virginia Beach, 45 percent of the city's annual budget is used to run the schools.
School officials agree that their 1996 budget is ambitious. But they say it will pay for programs and benefits that parents and employees have demanded.
The budget calls for a salary increase for teachers and staff, the addition of a second campus for a popular alternative school, a magnet school for gifted students and a fleet of buses to correct one middle school's scheduling problems.
Mordecai L. Smith, the school system's chief financial officer, said he could probably save $2 million to $3 million with relatively painless cost-cutting measures, such as leasing new school buses instead of buying them. Beyond that, however, school programs will suffer, he said.
``We don't have a whole lot of what I would call cushion in this budget,'' Smith said.
City Council members and officials, who will get their first look at their 1996 budget March 28, say they are focused on maintaining the services they already have.
The only significant new programs in the city budget will be an amphitheater and the proposed agricultural reserve program, Block said. But both programs will pay for themselves eventually, he said, by respectively bringing more tourists into the city and helping to slow the pace of costly suburban development.
Block said he wants to be particularly conservative with next year's budget because of the likelihood of state and federal budget cutbacks.
State funding accounts for more than half the school's yearly budget, but that share is shrinking.
The federal government has the power to wreak havoc on the city budget as well. Federal impact aid, paid to cities with military installations to defray costs of schools and other services, may be eliminated or severely cut. The city stands to lose about $5 million - which works out to about 3 cents per $100 property tax rate increase.
``These are things beyond our control,'' Block said. ``We would be wise to be cautious.''
Smith said he is sensitive to the city's economic concerns.
``I'm also very concerned about meeting the needs and priorities of the school system,'' he said.
Teachers and other school workers want raises. The School Board has agreed to offer a 3 percent increase for employees not already at the top of the pay scale. The amount has not satisfied the demand.
Parents of academically gifted students have complained for years that city schools do not do enough to challenge their kids. The school system's budget includes money to pay for two magnet schools, one for fourth- through eighth-graders and one for high schoolers.
Princess Anne Middle School parents want their school to be on the same schedule as other middle schools. Because there have not been enough buses, the school has operated on the high school schedule.
It will take 38 new buses to correct the problem.
If all of those items are funded, the school system would spend $4,488 per student next year, under the state's $5,280-per-student average.
That is, assuming council members would be willing to raise taxes to pay for the school system's budget. Most likely, they will not.
Hiking taxes is usually considered a bad move politically and could hurt the city in the long run.
One of Virginia Beach's strongest selling points to industry and homeowners is its tax rate. With the lowest in the region and one of the lowest in the state, the Beach is able to lure businesses, which in turn help keep the tax rate low.
The council had already predicted the need for a tax increase for next year, because of the staffing and maintenance requirements of all the new schools.
At the recent council retreat, when the council first discussed its budget woes, Mayor Meyera E. Oberndorf said she and others up for re-election next spring might pay for any tax increase with their political jobs.
``The ones who just got re-elected are so relieved that they don't have to deal with this,'' she said.
Because the city's budget is not yet complete, it is unclear where cuts could be made to provide more money for the schools.
The agriculture reserve program, not yet approved by the council, is a possible target because it is the only long-term new project. That program would cost between $3 million and $3.5 million a year for the next three decades. It has the informal support of most of the council members, however, who see it as crucial to the city's long-term stability. Under the program, the city would pay landowners in the rural southern half of the Beach to agree not to sell their property for development.
Council member Barbara M. Henley, who helped draft the plan, believes it will save money in the long run, because the city won't have to build as many schools, lay as much sewer and water pipe or provide as much police and fire protection.
Even if the program were eliminated, though, many other cuts would be needed to provide $15 million in new money for the schools.
Other possible cuts would include reducing the size of employee salary increases, expected to be about 3 percent; or delaying repairs to the city's roads, buildings, fire trucks and other equipment.
``We have a very substantial investment in public infrastructure for roads, buildings, you name it, so the issue is a big one,'' Block said. ``You can pay me now or pay me later.''
KEYWORDS: VIRGINIA BEACH SCHOOL BOARD BUDGET VIRGINIA BEACH CITY
COUNCIL by CNB