PORTSMOUTH, Va. (WAVY) – When it comes to generating tax revenue, the chips are stacked against this city.
Key real estate, including a huge naval shipyard and naval medical center, are tax-exempt, and the city of about 100,000 residents is hemmed in by Chesapeake, Suffolk, and the Elizabeth River. But if projections are truly predictive, Portsmouth’s luck is about to improve.
“We don’t have the tax structure that other (cities in the region) do. This gives us a fighting chance, if you will,” said long-time Commissioner of the Revenue Franklin Edmondson.
He says the city expects to rake in anywhere from $12 to 16 million dollars in tax money each year from the Rivers Casino, which is set to open later this month on Victory Blvd.
Who will get those millions in new tax dollars? Right now, those are the hole cards that have yet to be turned over.
“That will be left to the City Manager as well as Council – I assume fire, police, schools and city agencies,” Edmondson said. “Every citizen in the City of Portsmouth is gonna benefit.”
Portsmouth is getting the Commonwealth’s first full-service casino, but Virginia’s first temporary casino opened last July in Bristol. That operation gives some context as to whether the tax projections are aligned with reality – or some pie-in-the-sky longshot.
“The revenues have been pretty close to projections,” said Eric Workman, County Administrator for Bland County as well as the treasurer for the Bristol Transportation District Regional Improvement Commission.
The BTDRIC comprises 12 counties and the independent cities of Bristol and Norton. Each gets an equal share of the local tax revenue that comes in from the temporary casino, which is the precursor to a Hard Rock Casino expected to open next year.
Workman says they’ll receive payouts from the Lottery Board each quarter, and then the localities will disburse those funds annually.
“It’s gonna be really interesting come the fall of the year of ’23 to kind of see where these funds are being allocated,” Workman says.
The host locality gets roughly 6% of the casino’s adjusted gross revenue – total wagering minus total paid-out winnings.
Edmondson says Portsmouth’s piece of the action will get tossed into a pot of other tax money that currently collects between 66 and 70 million dollars, which includes tax revenue other than real estate taxes. So the annual increase in that fund from casino wagering will be about 20%.
“This is our lifeline, for all intents and purposes,” Edmondson said. “When you enhance a locality to the tune of about $12 to 16 million, obviously that’s a lot of revenue that can be used here locally.”
On top of that stack of money will come additional tax revenue from the restaurants and a potential on-site hotel at the Rivers Casino. Those parts of the business get taxed in the same way as if they were located anywhere else in Portsmouth.
Edmondson says it’s the largest stake in a three-way parlay of new recent sources of tax money for Portsmouth that also includes the medical marijuana dispensary that opened two years ago, and the offshore wind turbine factory planned for an area adjacent to the Port of Virginia.
