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What’s in Virginia Beach’s proposed budget — and what’s not

Despite cutting the city’s tax rate in the new budget, growth in real estate values means Virginia Beach will still bring in more in taxes next fiscal year. (Photo by Ryan Murphy)
Despite cutting the city’s tax rate in the new budget, growth in real estate values means Virginia Beach will still bring in more in taxes next fiscal year. (Photo by Ryan Murphy)

Virginia Beach’s city manager unveiled his proposed budget for the next fiscal year, which starts July 1.

There aren’t many surprises — highlights have been broadcast by City Council in recent months, ahead of the presentation of the budget plan at this week's council meeting.

And as always, things can change. This is City Manager Patrick Duhaney’s first draft to the council. The body will work through the fine details of the spending plan and could make several tweaks before voting on approval on May 14. 

Here’s what you can expect to see - and what was left out - of the new budget proposal:

What’s in the budget

  • Millions more in spending — The city’s budget is growing by $71 million for a total annual $2.6 billion budget. The categories with the largest growth are funding for schools, 3.5% pay raises for city employees and the increasing cost of employee health insurance premiums.  
  • A real estate tax rate reduction (but still resulting in higher tax bills) — The city is cutting the tax rate by 2%, but real estate assessments are going up more than 7%. That means the average property owner will still pay around 5% more on their real estate taxes this year. City Council requested earlier this year that Duhaney knock a couple of cents off the tax rate to try to ease the squeeze for property owners and keep it more in line with previous annual growth. “The conditions of today are that the assessments are rising at an unsustainable rate and it’s incumbent on us to be responsive to that rise,” Councilman Michael Berlucchi said during the presentation of the budget.
  • Recycling fee increase — Staff told city leaders in the fall that it would have to double the cost to homeowners more to keep curbside recycling running in the city. That increase is built into the budget Duhaney presented Tuesday. The fee will go up $3.05 per month, or $36.60 more annually, for households that can use the curbside service.
  • Rudee Loop Park — The full $60 million to design and construct a park at the southern end of the Oceanfront is in the budget, allocated over the next two years. A few million will get spent this year to get things going, but the bulk of the money won’t be spent until next fiscal year, when the park is actually built.

What’s not in next year’s budget

  • New large-scale Oceanfront events — There is no allotment for any new festivals at the Oceanfront. Things already on the calendar, like Something in the Water or the Jackalope extreme sports festival do have disbursements set aside for them. The Council assembled a task force to examine how the city should be funding festivals, which still has a handful of planned meetings left before it reports back to the council.
  • A Housing Trust Fund — The City Council has consistently said addressing the affordable housing shortage is one of its top priorities. Housing trust funds directly fund projects that improve housing availability and have been used in hundreds of cities across the nation, including several in Virginia. The city’s own housing office and a recently completed housing study have identified a trust fund as one of the best ways to tackle the problem. But at a council meeting earlier this month, several council members expressed skepticism about the concept and taking millions out of the city’s general fund to pay for it. “I think we need to look at things that are not going to cost us dollars,” said Vice Mayor Rosemary Wilson. “I couldn’t, in good conscience, couldn’t put our tax dollars into something like this $5 to $10 million trust fund.”
  • A centralized stormwater operations facility — Virginia Beach asked the state for $15 million to help build a centralized stormwater operations building, but that request went nowhere. It was cut entirely from the final version of the state budget that’s currently under consideration in Richmond. The project doesn’t appear in the city’s 5-year Capital Improvement Plan at all, but there are several other stormwater projects and facilities in that budget and set to get underway, including a major stormwater management facility on 17th Street.
Ryan is WHRO’s business and growth reporter. He joined the newsroom in 2021 after eight years at local newspapers, the Daily Press and Virginian-Pilot. Ryan is a Chesapeake native and still tries to hold his breath every time he drives through the Hampton Roads Bridge-Tunnel.

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