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Richmond City Council Adopts Lean $744M Budget Amid Coronavirus Pandemic

city council chambers
The approved budget is $40 million lighter than what Mayor Levar Stoney originally pitched back in February. (Photo: Roberto Roldan/VPM News)

Richmond City Council adopted a roughly $740 million 2021 fiscal year budget on Monday.

The approved budget is $40 million lighter than what Mayor Levar Stoney originally pitched back in February. His administration pulled back on spending after the coronavirus pandemic hit. Some of the key cuts were a reduction in new school spending from $16 million to $6 million and the scrapping of a 2 percent pay increase for city workers. 

Following City Council’s vote, Stoney said the budget was reflective of the uncertain times.

“This budget is not the budget we first proposed, nor is it the budget we wanted, but it’s the budget we have to live with in light of these most difficult and challenging times,” Stoney said in a statement. “Amid the uncertainty of this pandemic, we must be prepared to make adjustments as we go, and we fully expect to do so in the coming months.”

Four city council members voted against approving the budget, saying the council should take an additional two weeks to vet the projected losses in the revised budget. Some, like Councilwoman Kim Gray, argued that the projected losses were not realistic.

Richmond City Council members, who normally propose numerous budget amendments and attempt to push funding toward special projects in their district, dealt with only one proposed amendment this year. Fifth District City Councilwoman Stephanie Lynch was successful in diverting $300,000 in cigarette tax revenue from a smoking cessation program to a COVID-19 relief fund focused on affordable housing and eviction diversion.

Lynch specifically asked that the fund be used to help low-income residents making below 30 percent of the area median income, or about $27,000 for a family of four.

“There's programs out there that meet the needs of a lot of our different populations, but there's not a whole lot of assistance for folks that are struggling to make ends meet,” Lynch told VPM.

The budget passed on Monday reflects a projection of $40 million in lost tax revenue by city officials. Expected real estate tax revenue took the biggest hit when the city assessor tamped down his forecast by 5 percent, or about $17 million. As many businesses remain closed under state social distancing restrictions, business license and meals tax revenue was expected to decline by around $10 million.

And more budget cuts could be on the horizon. Officials from the Stoney administration and Richmond City Council plan to meet regularly to see if more amendments may be necessary.

Richmond Budget Director Jay Brown warned last month that the full economic impact from the shutdown is still a big question mark.

“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 told City Council on April 13. “There are still a significant amount of unknowns that will result in changes to these projections.”

Richmond officials expect to have a better picture of the city’s economic recovery by August, when more budget amendments could be necessary. The city has already instituted a hiring freeze for all open positions.

 

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