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Hampton managers warn revenues down $6.2M as council orders finance-committee review of tax guideline
Summary
City staff told council the city projects roughly $6.2 million in FY21 revenue losses driven by COVID impacts on meals, lodging and admissions; council asked the finance committee to review the real-estate tax-rate stabilization policy and consider longer averaging approaches.
City finance staff told the Hampton City Council on Feb. 17 that local revenues remain the city’s dominant funding source and that the pandemic has left the FY21 revenue picture $6.2 million short of prior projections. "On the revenue side, about 85% of our revenues are locally generated," the presenter said during the context briefing, outlining the city’s “big five” taxes and a separate COVID-impacted revenue bucket.
Council members focused discussion on the city’s long-standing real-estate tax-rate stabilization policy. Councilwoman Brown asked for a review of the policy and whether the tax burden remains appropriate: "What would be sort of an optimal tax burden on our citizens?" she said. City staff agreed to ask the council finance committee to examine options including a multi-year rolling average and to report back as the FY22 budget is developed.
The manager and staff stressed that some revenues — such as meals and lodging taxes plus admissions — remain depressed and that recovery timelines are uncertain. Staff also said they are preserving roughly $5 million in CARES Act funds to cover public-safety costs into FY22 while cautioning that federal relief remains uncertain and should not be assumed in the baseline budget.
Council directed staff to return the finance committee’s findings before formal adoption of the manager’s recommended budget, and staff signaled they will model alternatives rather than automatically proposing a rate change.
