Richmond's Penny Sales Tax: Another Tax, No Economic Plan, and a Financial Crisis Waiting to Happen

 

Richmond's Penny Sales Tax: Another Tax, No Economic Plan, and a Financial Crisis Waiting to Happen

Mayor Danny Avula and CAO Odie Donald want taxpayers to help rescue Richmond's schools. But who is going to rescue Richmond from its failure to plan for its financial future?

Richmond has a spending problem, a revenue problem, and increasingly, a leadership problem.

And City Hall's latest answer? Another tax.

The proposed one-cent sales tax increase for school construction may sound reasonable. Richmond Public Schools desperately needs modern facilities, and decades of deferred maintenance have created enormous capital demands.

But before Richmond residents are asked to pay another penny, they deserve an answer to a much more important question:

Where is Mayor Danny Avula's economic development plan, and why hasn't Chief Administrative Officer Odie Donald presented a credible strategy to grow Richmond's tax base?

Because without meaningful economic growth, another tax is not a solution. It is another temporary response to a much larger problem.

A Penny for Schools. But What About Everything Else?

The proposed additional sales tax is projected to generate approximately $47 million annually and could support substantial school construction financing.

That is real money. And Richmond's children deserve decent schools.

But let's be clear about what the tax will not accomplish.

It will not solve Richmond's operating budget challenges. It will not repair the city's aging infrastructure outside the school system. It will not eliminate the financial exposure associated with major development projects. And it will not produce the new businesses, jobs, and commercial investment Richmond needs.

Worse, the city has not demonstrated that it has corrected the maintenance practices that allowed school facilities to deteriorate in the first place.

What good is financing hundreds of millions in school improvements if Richmond cannot demonstrate how it will maintain those buildings over the next 20 years?

That is not an argument against investing in schools. It is an argument against repeating expensive mistakes.

Avula and Donald: Where Is the Economic Development Strategy?

Mayor Avula has had ample opportunity to articulate a bold economic vision for Richmond.

CAO Donald has had the opportunity to translate that vision into an actionable administrative strategy.

Yet where is the comprehensive economic development blueprint?

Where are the targets for attracting major employers? Where is the strategy for competing with Henrico and Chesterfield? Where are the projections showing how much additional commercial tax revenue Richmond intends to generate over the next five years?

And where is the plan to transform vacant and underutilized property into productive, revenue-generating assets?

Richmond does not lack economic potential. It lacks a sufficiently visible, coordinated strategy for realizing that potential.

The administration can discuss fiscal discipline, operational improvements, and budgetary challenges all it wants.

But managing decline is not the same as creating growth.

A mayor should be more than the public face of the next spending proposal. A CAO should be more than the administrator of an increasingly difficult budget.

Richmond needs leaders who can demonstrate how the city will expand its economic base, not simply identify new ways to collect money from the people already living here.

The Financial Warning Lights Are Flashing

Consider Richmond's existing obligations.

The Diamond District has generated questions about financial exposure, development execution, and accountability. The administration continues to entertain an expensive downtown convention hotel while the future of the Richmond Coliseum remains unresolved.

Meanwhile, schools require massive capital investment, infrastructure needs continue to accumulate, and the city faces pressure to provide real estate tax relief.

These are not isolated issues.

They are competing demands on Richmond's financial capacity.

Yet where is the comprehensive, publicly accessible financial analysis showing how Richmond intends to pay for its commitments over the next decade?

Where is the administration's detailed assessment of what happens if revenues grow more slowly than projected?

And why should residents have confidence in additional financial commitments when the city has not adequately explained how its economic development strategy will support them?

Richmond cannot continue making major spending decisions as though each project exists in its own financial universe.

Eventually, the bills come due.

And when they do, taxpayers are the ones left holding them.

The Mayor Cannot Have It Both Ways

Mayor Avula has acknowledged concerns about slowing revenue growth while discussing reductions in the real estate tax rate.

But modest tax relief, however welcome, does not substitute for a serious plan to strengthen Richmond's economy.

Neither does a dedicated sales tax for schools.

The administration cannot warn that revenue growth is slowing, pursue expensive development initiatives, acknowledge substantial unmet infrastructure needs, and then expect taxpayers to accept another tax without demanding a comprehensive financial strategy.

That is not fiscal leadership.

It is financial improvisation.

If Richmond's revenue outlook is deteriorating, the Mayor and CAO should be explaining exactly how they intend to reverse that trend.

What industries are being targeted? What businesses are being recruited? What commercial properties are being prioritized? What incentives are being considered? And what measurable results should residents expect?

If the administration has an aggressive economic development strategy, publish it. If it does not, explain why.

Schools Deserve Investment. Taxpayers Deserve Accountability.

Supporters of the penny sales tax have a compelling argument: Richmond cannot afford to allow its school buildings to deteriorate further.

They are right.

But taxpayers have an equally compelling argument: Richmond cannot afford to keep addressing financial problems without confronting the policies and management failures that helped create them.

The city needs a comprehensive capital maintenance program, realistic long-term financial forecasts, disciplined development priorities, and an economic growth strategy with measurable benchmarks.

The Mayor and CAO should present that plan before asking residents to accept the idea that another tax represents meaningful fiscal progress.

A dedicated school funding source may help solve one problem.

It does not excuse the administration from solving the others.

The Bottom Line: Richmond Needs Economic Growth, Not Another Excuse

Richmond's fiscal challenges did not begin with Mayor Avula or CAO Donald. Years of deferred maintenance, questionable development decisions, and inadequate long-term planning preceded their arrival.

But they are the officials responsible for leading the city now.

And inherited problems do not excuse a failure to develop solutions.

The proposed penny sales tax may help finance desperately needed school improvements. But it cannot substitute for an aggressive economic development strategy, and it will not protect Richmond from the consequences of stagnant revenues and growing financial obligations.

Richmond residents should demand more than promises, projections, and another tax.

They should demand a five-year economic development plan, measurable revenue growth targets, a realistic accounting of the city's financial commitments, and public accountability for results.

Mayor Avula and CAO Donald need to stop treating Richmond's financial problems as a series of individual budget emergencies and start addressing the underlying economic weakness.

Because the most troubling question is not whether another penny will help Richmond's schools.

It is whether Richmond's leadership has any convincing plan for how the city will afford everything else.

And right now, that question deserves a far better answer than City Hall has provided.

Brian K. Telfair | Publisher | The Richmond Chronicle