Show us the money: To support and fund the current Virginia Beach tourism projects; to support the planned tourism projects (the headquarters hotel for the convention center, and entertainment venue for the old Dome site); and for the major projects planned for our future – all the light rail costs and the redevelopment of the Strategic Growth Areas.
The money to support existing tourism projects comes from our tax revenue, and the money for all the new projects is in your bank account – for now.
Money to support existing tourism projects over the last decade or so has consistently come from citizens tax revenue received from the oceanfront businesses plus additional tax revenue collected citywide (non-tourist areas) from meal, hotel lodging and amusement taxes. These taxes are used to support: The Tourism Growth Investment Fund (TGIF) at $18 million per year, to buy the convention center at $15.2 million per year, and to pay the annual operation cost of the convention center at $6 million per year. Just these expenditures total $39.2 million per year. The annual meal, lodging and amusement tax revenue from the oceanfront in recent years has been approximately $20 million leaving a shortfall of $19.2 million per year.
What is the source of that $19.2 million? To support existing tourism projects council uses 36.4 % of citywide meal tax, 75% of citywide lodging tax and all of the citywide admission tax. These tax revenues are entered into a special “dedicated fund.” These dedicated funds are spent by our council on those major tourism projects. If the past is an indicator, a headquarters hotel and entertainment venue at the Dome site will add to the taxpayers burden.
The tax revenue taken by council for dedicated funds is tax revenue that cannot be spent for other projects and is revenue that must be replaced by other taxes – namely our real estate taxes. In addition to an increase in our real estate taxes, council increased our water rate fee and our sewer fee last year and will increase them again soon. And council is now considering a new trash collection fee.
Our Virginia Beach City Council, now working on the operating budget for 2012, is searching for funds, even trying to squeeze more dollars from our schools. And, council is planning to charge ahead with the headquarters hotel, the entertainment venue at the Dome Site and continue planning for light rail.
Council is not looking to reduce spending or even hold spending constant, but will increase our real estate taxes and a number of fees to provide revenue as needed for council projects.
Council, show us the money before you start any new programs.