Norfolk’s $1.6 billion budget proposal includes funding for everything from an hour of free parking in downtown decks to staff raises, support for housing developments and flooding prevention. Rising city revenues will make it possible to fund the new initiatives without raising tax rates.

Norfolk City Manager Pat Roberts presented the city’s proposed budget for the 2026 fiscal year to City Council members during a Tuesday work session.

The proposal includes a $1.6 billion operating budget, a $260 million capital improvement plan, a $6.7 million annual plan for U.S. Department of Housing and Urban Development block grants and a $141 million annual grants plan.

Norfolk’s general fund revenues grew about $37.7 million, or 4.4%, from $864.3 million last year to $902.1 million this year.

Roberts said revenue growth was due primarily to a 5.7% increase in real estate assessments, which includes new construction. Other factors include increased consumer spending leading to revenue increases in hotel, restaurant and general sales taxes.

In the current proposal, Roberts said all city tax rates remain unchanged. The current real estate tax is $1.23 per $100 of assessed value and the personal property tax for vehicles is $4.33 per $100 of assessed value.

But the proposal includes a $5-a-month increase in the garbage collection fee to offset recycling program cost increases and beach collection costs.

Roberts said the proposed budget was crafted with current economic conditions in mind — even though the cost of living is high, inflation is easing and unemployment rates are low. However, he said there is significant uncertainty regarding federal spending and the impact of tariffs on import and export activities.

Operating budget

The budget proposal includes a 2.5% wage increase for all general, constitutional and nonsworn employees and a step increase for sworn public safety employees and 911 telecommunicators. It also includes a phased implementation of a competitive step and grade compensation plan over the next 6-12 months.

Roberts said the compensation plan is a way for the city to retain top talent from being poached by other cities and businesses, as well as attract federal employees laid off by Donald Trump’s cutbacks.

“We are certainly doing a lot of things like this to make ourselves attractive to anyone who wants to work in public service, to include any recently separated federal employees,” Roberts said.

For public safety, the proposed budget includes $3.2 million in spending on items like 20 new paramedic positions, a new ladder truck and two pumper trucks for fire and rescue, 18 new police vehicles and a new Department of Military and Community Affairs which will centralize city violence intervention efforts, Roberts said. The move expands the current Office of Veteran Services and Military Affairs , he added.

For housing initiatives, the budget includes $7.6 million for items like demolishing existing buildings at the old Globe Iron site off Princess Anne Road to make way for redevelopment, continuing redevelopment of the St. Paul’s area and pursuing federal block grant funding for housing projects.

Notably not included in the budget proposal is any funding for a housing trust fund the city proposed last year . Instead, Roberts said the city would redesignate $2 million from previously appropriated funding to support housing initiatives.

That might not be enough to please some local housing advocates. At recent council meetings, several activists with New Virginia Majority asked the city to appropriate $3 million for a housing trust fund and another $1 million for a city eviction prevention program .

The city hopes to respond to both poor perceptions of traffic flow and the condition of city streets from a recent resident survey with about $525,000 in transportation improvements, which include items like enhanced traffic signals, improved traffic flow at Harbor Park, the reconstruction of Westminster Avenue and funding to repair bridges, including Military Highway over Virginia Beach Boulevard.

To attract more residents and visitors to downtown, Roberts said the proposed budget would make parking free in all downtown garages for one hour. After that, rates would remain the same as they are currently, starting at $3 for one to two hours. To offset the free parking, city meter costs would increase by 30 cents each quarter of an hour for a $1.20 hourly increase. Current meter rates vary by location.

Capital improvement plan spending

The proposed budget includes $44 million in capital improvement funds for the city’s flood wall project, called the Coastal Storm Risk Management Project , in addition to other projects like beach renourishment, community park improvements and a new playground at Crossroads School. However, Roberts said the future of the flood wall project beyond this fiscal year is in jeopardy because no funds are included in the state’s upcoming budget. The federal government plans to fund 65% of the $2.66 billion project, leaving the city and state to fund the remaining $931 million.

“I just want City Council aware of the fact that we need some state money to go with it,” Roberts said. “It would be very challenging for the city to cover fully the non-federal share.”

An additional $23.2 million in capital improvement spending would turn part of Princess Anne Road near Broad Creek from four to two lanes and add bike lanes, reconstruct and rehabilitate The Hague’s bulkhead to prevent flooding, replace the Bute Street bulkhead and improve drainage at 10th Bay Street and Chesapeake Boulevard.

As part of $45.2 million in proposed capital improvement funding for tourism, Roberts said the proposed budget would fund a new event marketing position at SevenVenues, enhance event productions at Ocean View Beach Park and Five Points Park, improve facilities at the Virginia Zoo, support sand replenishment in Ocean View with enhanced billing collection for vacation rentals and provide additional funding for outside agency events.

Residents can learn more about the budget and give feedback at a series of meetings in April. City Council will hold a work session April 8 on the budget. A budget public hearing is scheduled for 6 p.m. April 9 at Granby High School. Council members will also discuss the budget at a April 29 retreat and work session. Also on April 29, the city will hold a public hearing on the real property tax rate. The budget is expected to be adopted by May 13.