Norfolk
is flooding. So elected officials and city administrators have found
a solution to the city's flooding problems – raise taxes.
That's
not as devastating or detrimental as it may seem and certainly not as
disastrous as rampant flooding.
The
money would pay for pumps, gates and other flood prevention
paraphernalia to prevent Norfolk's streets, sidewalks and homes from
drowning during storms.
Norfolk
is resilient. But there's a cost to resiliency.
“We
need to come up with short-term fixes for financing,” said City
Council member Barclay Winn during Council's Oct. 27 work session.
Norfolk
officials place the cost to prevent flooding in certain areas of the
city at $100 million. Ghent, Pretty Lake in Ocean View and the area
bordering Mason Creek bear the brunt of flooding.
“I'm
not afraid to go to a public meeting and say we've got to raise taxes
10 cents if that's what it's going to take to pay for it,” said
City Council member Tommy Smigiel.
“My
takes is that the citizens are ready for this,” Whibley said.
Smigiel
suggested that tax increases could be offset by lower flood insurance
rates, due to flood prevention mechanisms, or higher home values. or
a combination of both.
City
Manager Marcus proposed two options.
One
is to hike waste water fees. The other is to form special taxing
districts, an option City Council seems to favor.
The
taxing districts are known as tax increment financing districts, or
TIFs. Another type of taxing mechanism is a special service district.
However,
TIFs and special service districts differ.
TIFs
are commonly used to raise revenue for redevelopment projects.
Municipalities use TIFs to finance much needed projects with the
promise of future tax revenue. Special service districts, on the
other hand, finance services, such as maintenance and operations.
The
boundaries of the district and the level of taxes are set by city
council. A taxing district can be dissolved by city council. The
revenue raised from the higher taxes are used to fund the debt
service on bonds issued to raise money for neighborhood specific
projects.
Virginia
Beach has nine special tax districts, ranging from $1.05 per $100 of
assessed value of a property to $1.44 per $100 of the assessed value.
They fund projects such as sand replenishment at Sandbridge and the
maintenance of public property at Town Center. Virginia Beach's base
tax rate is 99 cents per $100 of assessed value.
Norfolk's
base tax rate is $1.15 per $100 of assessed value, up from $1.11 per
$100 of assessed value, the rate prior to 2013.
Norfolk
has two special taxing districts – the Broad Creek Renaissance Tax
Increment Financing District and a 48-block taxing district in
downtown Norfolk known as the Downtown Improvement District.
The
Broad Creek TIF was set up to pay for infrastructure costs in the
Hope VI project for the Broad Creek neighborhood in 2003. The city of
Norfolk doesn't list the tax rate for this district.
The
tax rate for the Downtown Improvement District, is $1.31 per $100 of assessed
value.
City
Council approved the district in 1999. It's status
was renewed in 2003, 2009 and 2014. It's authority expires in 2019.
Revenue
raised from the additional taxes funds the operations of the Downtown
Norfolk Council, a non-profit entity under contract with the city of
Norfolk.
Editor's
Note: The Downtown Norfolk Development Corporation, t/a Downtown
Norfolk Council is the "trading as" name for the Downtown Norfolk Development Corporation, a 501 c-6 organization.