With a looming recession brought on by the coronavirus pandemic, Richmond Mayor Levar Stoney’s administration introduced harsh new spending reductions for next year’s budget.
In a presentation to City Council on Monday, officials said they expect a decline of nearly $40 million in revenue from the budget submitted just one month ago. Property tax revenue is expected to take the biggest hit, declining by more than 5 percent, or roughly $17 million. Stoney’s administration has introduced budget amendments to City Council, reflecting an equal amount of cuts to new spending.
While Richmond Budget Director Jay Brown said the budget amendments reflect the best projections from city and state officials, the continuing public health and economic crisis could mean future cuts will be necessary.
“This budget that we have presented to you today is an update date based on a snapshot based on information we know at this time,” Brown said. “There are still a significant amount of unknowns that will result in changes to these projections.”
The administration is proposing to eliminate a two percent salary increase for city employees and a pay increase for police and firefighters. Similarly, salary supplements for the Richmond Public Defender’s Office will be cut from next year’s budget. The city has already instituted a hiring freeze for non-essential workers.
A previously proposed $16 million increase in school funding will be reduced to about $6 million. Proposed increases to gas and water utility rates will be abandoned.
In a statement, Stoney said that, despite cuts, the budget continued to reflect the city’s values of “equity, opportunity, and fiscal responsibility to our residents.”
“This international crisis is forcing local governments everywhere to make tough, sometimes heartbreaking decisions when it comes to budgets,” Stoney said.
Next year’s budget is now proposed to have no new spending, holding steady at around $740 million.
Richmond City Council will have until the end of May to make their own amendments and pass a balanced budget. Since passing new rules last week allowing them to convene virtually, City Council has begun meeting weekly to discuss the budget.
City Councilwoman Kim Gray, who filed to run against Stoney for mayor in November, questioned whether the proposed reductions in revenues are too conservative based on how much businesses have been impacted.
“They’ve laid off thousands and thousands of workers,” Gray said. “They would have to rehire, retrain and work very hard to get up to full on operations. That would take several months.”
Gray suggested the city should base next year’s budget on the worst-case, rather than the best-case, scenario.
Council Vice President Chris Hilbert disagreed.
“I don’t want to come in here and start furloughing people and cutting jobs and doing drastic things, and then having to come back in here and pull it back,” Hilbert said. “This is an unfolding situation and no one could have anticipated this.”
Moving forward, a team of Stoney administration officials and City Council staff will assess recovery efforts and make additional budget recommendations to Richmond City Council.
You can read the full presentation by Richmond’s Budget Director to the City Council here.
