DATE: Wednesday, May 14, 1997               TAG: 9705140510

SECTION: LOCAL                   PAGE: B7   EDITION: FINAL 

SOURCE: BY MAC DANIEL, STAFF WRITER 

DATELINE: CHESAPEAKE                        LENGTH:   52 lines

$436 MILLION CHESAPEAKE BUDGET INCLUDES TAX AND FEE INCREASES THE SPENDING PLAN FAILS TO ELIMINATE A LOOMING SHORTFALL OF $19 MILLION.

Taxpayers will pay more in Chesapeake starting in July, the result of an assortment of tax and fee increases approved Tuesday that eliminated only a fraction of the city's two-year budget shortfall.

By the end of the night, the City Council had passed a $436 million operating budget and dug itself a $1.8 million hole.

That's despite all the new tax and fee increases.

The council then asked City Manager John L. Pazour to review all unstarted capital projects and to cut spending within city departments to cover the gap.

In the end, Mayor William E. Ward said the adoption of the budget ``did not place the city's fiscal integrity at risk.''

Pazour was asked to report back to the council in six months with an update.

Pazour will meet with the city's department heads today to begin attempting to cut spending without affecting city services.

``We've got a great deal of work to do,'' said Pazour during a break in the council's meeting. ``It's a very tight budget.''

The approved tax and fee increases included a 5-cent boost on each pack of cigarettes, increasing the monthly cost for emergency 911 phone service from 50 cents to $1.95, and a new building application fee of $25.

The council unanimously voted against increasing the motor vehicle license application fee, increasing residential and commercial gas utility taxes, or creating cellular phone and cable television taxes.

Councilman John M. de Triquet was the only member who voted against all of the proposed increases. In the case of the emergency 911 phone increase, de Triquet said that the money should come from the capital budget, not operating funds.

Pazour had banked on $2 million in new tax and fee increases in his proposed budget. He got $2.5 million approved.

But the council attached strings that left Pazour with only $236,600 in new money to cover the budget gap.

The emergency 911 phone tax money and advanced emergency medical services fee were earmarked for the first phase of an $18 million new emergency radio system.

The cigarette tax increase was targeted to an investment program within the Department of Economic Development.

Almost all of requests for late additions were deferred until Pazour and city budget officers have a better idea about revenue from property and business taxes, figures which should become available next month.

The city is facing a predicted $19 million shortfall over the next two years, the result of a downturn in growth and an increase in the city's level of debt. KEYWORDS: CHESAPEAKE BUDGET

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