DATE: Wednesday, April 2, 1997              TAG: 9704020491

SECTION: LOCAL                   PAGE: B1   EDITION: FINAL 

SOURCE: BY ALETA PAYNE

        AND KAREN WEINTRAUB 

        STAFF WRITERS 

DATELINE: VIRGINIA BEACH                    LENGTH:   76 lines

COUNCIL WANTS BOARD TO SHARE HEAT FOR TAXES

For three months, school and municipal leaders have been bickering about how much to spend on public schools next year.

Now, they are talking behind the scenes about a compromise that would give the schools millions more next year but would still require the School Board to take the heat for a real estate tax increase.

The board says it needs $13 million more than the city so far has been willing to provide. Raising that much money would require a 7-cent increase in the real estate tax rate, an amount that would levy an extra $70 on the owner of a $100,000 home.

Several City Council members and School Board chairman Robert Hagans Jr. acknowledged Tuesday that they were seeking a compromise.

``The bottom line is both sides are talking within our own camps and across the road,'' Hagans said.

During a council work session, Linwood O. Branch III said he hoped the two sides could come up with a ``mutuallyagreeable budget . . . where we can all hold hands instead of point fingers.''

The disagreement is over how much public education the city can afford next year.

The board says the extra money is badly needed to reduce class sizes, expand access to magnet school programs and expand the preschool program for at-risk students, among other projects.

Council members, in the face of popular support for the schools and public opposition to tax increases, want the School Board to share political responsibility for any tax increases. That's important now because next May, nine council seats and nine board seats are up for election.

The School Board does not have the power to raise taxes. The council can raise taxes but only has limited power to tell the board how to spend its money.

Numerous budget workshops and public hearings are scheduled before the final budget is approved May 13, but some of the most crucial work is likely to be done in private conversations.

Mayor Meyera E. Oberndorf said during Tuesday's council session that Hagans had told her some board members were not willing to compromise - they wanted the budget as they had approved it.

But Hagans said Tuesday that while some on the board were anxious to see the budget fully funded without a tax increase, there was room to negotiate just how that would be accomplished.

What appears most likely is a tax increase smaller than 7 cents, thanks to some additional city funding and the use of money expected to be left in school coffers at the end of this fiscal year. School officials estimate the surplus to be at least $12 million. City officials put it between $15 million and $24 million.

Superintendent Timothy R. Jenney has said he wants to reserve a portion of those savings to build a financial cushion in case of tough financial times. He also said some of the surplus could go to critical needs neglected because of tight finances in previous years, such as vehicle and equipment maintenance. The money cannot be used for expenses that will occur every year, such as salaries.

Under a new way of funding schools approved by the City Council in February, public education in the Beach receives a fixed percentage of certain tax streams. If the district decides it needs more local money beyond that amount, the School Board is supposed to request a tax increase.

Although the revenue-sharing policy was supposed to reduce annual tensions over the budget, that hasn't happened. Neither side wants to take the heat for a tax increase. Trust - never very high between the two governing bodies - has eroded even further in recent months.

The City Council approved a resolution Tuesday notifying School Board members that it was up to them to request a tax increase if they wanted the budget to be fully funded. Several council members made clear that the vote was a procedural requirement and not intended to be a slap at the board. MEMO: Landowners reap benefits of Virginia's Land Use Program/ Public

Life, B3 KEYWORDS: TAX INCREASE VIRGINIA BEACH SCHOOL BOARD VIRGINIA

BEACH CITY COUNCIL

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