City manager proposes cut to Virginia Beach real estate tax rate, $200 yearly short-term rental fee in new budget

Posted: Mar 24, 2021 / 12:13 AM MDT

Updated: Apr 20, 2021 / 11:33 PM MDT

VIRGINIA BEACH, Va. (WAVY) — As economic struggles persist due to the ongoing COVID-19 pandemic, the City of Virginia Beach taxpayers could see relief in the form of a real estate tax rate cut.

City Manager Patrick Duhaney’s fiscal year 2022 budget recommends cutting the real estate tax rate by 1 cent, in order to set the taxing amount at $1.0075 for each $100 of assessed property value.

In a presentation to Virginia Beach City Council on Tuesday, budget director Kevin Chatellier said while it would reduce city revenues by $6.2 million — $2.9 million of which will be docked from the Virginia Beach City Public Schools share — it’ll “provide relief to both residents and commercial businesses” alike.

The entire budget proposal for Virginia’s largest city is $2.2 billion, a more than 6% increase over the previous year which saw City Council cut $67 million in order to try to soften the blow from the pandemic.

“City Council established the reserves on projects, implemented the continuation of the hiring freeze and it really has put us in a good position,” Chatellier said.

On top of the real estate tax rate cut, the proposed budget calls for another delay of a 3.5-cent increase in the stormwater rate. The $3.1-million loss will be made up by using reserves.

All other taxes and fees will remain as they currently are.

The proposed budget includes a 3% pay increase for city employees and would help fund the proposed 5% increase for school employees. No city employee received a raise last year.

Many of the city’s more prominent initiatives were highlighted in the presentation including the constant battle against flooding and sea level rise.

Duhaney is proposing to add a pipe cleaning crew to proactively clean stormwater pipes as well as a crew to better maintain retention ponds. He also includes $9.9 million in new funding for stormwater management.

In order to better regulate short-term rentals, a $200 yearly fee per operator would be collected in order for the city to hire two new employees dedicated solely to ensure compliance with the city rules. Duhaney also added that the fee will help fund a 24/7 hotline where residents can make complaints about homes being used improperly as Airbnb’s.

Duhaney’s first budget as the city manager also includes $3 million to be set aside to potentially implement findings of a market salary survey that has been requested by city employees.

Finally, the budget will bring back funding cut in the previous budget.

The city manager wants to fund the hiring of six new positions to help implement recommendations from the Hillard Heintze report on the May 31st mass shooting.

He also intends to move forward with the hiring of 30 firefighters and seven new paramedics for the new Burton fire station.

Those looking to weigh in on the proposed budget have the chance to give their opinion during two public hearings.