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Hampton proposed budget highlights tax relief, combating worker shortages

City Manager Mary Bunting said the new recommended budget includes more than $24 million in tax relief.

HAMPTON, Va. — There's a new budget proposal in Hampton, and it includes a lot of tax relief for people who live in the city. 

City Manager Mary Bunting released the FY2023 proposed budget on Friday, and it also mentions efforts to address the city's worker shortages highlighted by the COVID-19 pandemic. 

The plan reduces the city's real estate tax rate by 6 cents, bringing the number down from $1.24 to $1.18 per $100 of valuation. 

It also considers the elimination of the local portion of the grocery tax and allots for a reduction of taxes on vehicles. In June, Hampton City Council approved valuing automobiles at 75% of their value for personal property taxes. 

"Together, with actions taken earlier this year, the recommended budget includes more than $24.6 million of tax relief for residents and property owners," wrote Bunting in a memo to City leaders. 

Bunting said changes to the vehicle assessment are intended to "offset the unusual used car market impacts on tax bills." In terms of the possible elimination of the 1-cent tax on grocery sales, Bunting said the move would save families more than $3 million annually, but the city budget would also lose that amount. So, city leaders are waiting on lawmakers in the Virginia General Assembly to finalize the state's budget, which could impact the financial decisions in Hampton. 

"If the state reimburses localities for this change, we will be able to lower the real estate tax rate even further and/or make other investments," wrote Bunting. 

With the COVID-19 pandemic, inflation, and job stress impacting many in the community, Mayor Donnie Tuck said city leaders want to lighten the burden. 

“With assessments, higher taxes, and even their own employment situations, we want to make sure we are doing the best value that we can," said Tuck.

The proposal also takes steps to combat the worker shortages, which are impacting municipalities across Hampton Roads.

It includes pay raises for public safety and other city employees while raising the minimum wage to $13 per hour for people who work for the city.

It also proposes job training programs for city employees to help fill key positions.

The pay increases include the following:

  • 7% for public safety staff and 911 operators
  • 6% for city workers earning less than $50,000
  • 5.5% for city staff earning between $50,000 and $100,000
  • 5% for city employees making more than $100,000

With other cities offering pay raises, Tuck said, "it was either keep up or possibly lose employees."

"We want to make sure that even though we have some vacancies, that we do not lose the employees that we have," said Tuck. 

Sean Lowe lives in Hampton and launched his landscaping business, Low Low Services, in 2019.

He said he didn’t predict a pandemic, and he likes the idea of tax relief.

“I think about all the folks who are having a hard time, and they are living paycheck to paycheck. And things like that are going to help them in general,” he said.

City leaders also want to help raise income levels of families, Tuck said, and any bit towards achieving that feat helps. 

"We know we have concentrated poverty, and we believe concentrated poverty also contributes to some of the crime and violence in our city," he said.  "So if we can make an impact on that, then we are a long way down the road of trying to raise the quality of life for all residents."

Taxpayers will get a chance to share their thoughts on the budget proposal.

Public hearings are scheduled for April 27 and May 4. Hampton City Council members will take a final vote on the budget on May 11. 

To read the complete city manager budget proposal for Hampton, click here.

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