Charlottesville City Council held its first public hearing on the budget and tax rates for the 2014 fiscal year Monday evening. The City’s revenues increased by 1.13 percent from 2013’s operating budget, said Ryan Davidson, the City’s budget and utilities analyst. On Monday night, the Charlottesville City Council held its first public hearing on the budget and tax rates for the 2014 Fiscal Year. Both the sales and use tax and the real estate tax are expected to bring in $550,000 more than in 2013, but Davidson said it is not because of a tax hike. “Revenue is going up,” he said. “But it’s not hitting the homeowners.” Funding for the school system and to the public safety and justice agencies account for about 58 percent of the city’s proposed 2014 expenditures. Under the current budget draft, schools will receive $44 million, a $961,000 increase from 2013, which marks the largest single increase in the City’s budget. That increase will balance out a reduction in state funding. In 2008, state funding accounted for 30 percent of school funding. In 2013 state funding fell to an all-time low of 21 percent — and the City has consistently increased appropriations to fill the hole. Another major part of the 2014 budget is the newly proposed Capital Improvement Program. The program would allocate about $11.18 million to upgrade local infrastructure, with the largest chunk going to either city schools or transportation and access projects. Heating, ventilating, and air conditioning systems would be installed in city schools, and Charlottesville High School would receive a fire suppression system under the program. Transportation improvements would include street paving, the creation of a transit bus replacement program and sidewalk repairs. Another $1.5 million of the program is set aside to fund affordable housing projects. Davidson said macroeconomic indicators have given City officials reason to be optimistic. Regional unemployment — currently at 4.4 percent — is trending downward, commercial and residential permit requests continue to climb, and retail vacancy rates have gone down 3.1 percent. Council will have several more meetings and work sessions that are open to the public before the final budget is approved April 9.