Virginia Beach council approves $3.86 billion FY2026 operating budget, amid meal-tax and library disputes

The Virginia Beach City Council approved the fiscal 2025–26 operating and capital improvement budgets and related ordinances on May 13 by a 10–1 vote.

The adopted operating appropriation ordinance authorizes $3,864,748,322 for the year beginning July 1, 2025, and ending June 30, 2026, and the capital program includes an appropriation and CIP through FY2030–31. The council also authorized multiple bond issuances and revenue bonds, and approved ordinances ranging from tax-levy settings to code amendments and a new dedication of meal-tax revenue to a Major Projects Fund.

The vote concluded a special formal session called by the mayor to consider adoption of the resource management plan, operating budget, capital improvement budget and related ordinances. Vice Mayor Wilson read the list of ordinances and moved approval; the motion passed after one council member indicated she would oppose the package.

Council deliberations and public comments highlighted three fault lines: dedicated meal-tax revenue for a new Major Projects Fund, proposed library position eliminations, and how the council may use Town Center tax-increment financing (TIF) funds. Council member Heather pressed for postponing the meal-tax increase and for clearer, targeted use of funds allocated for the ITA Athletic Village and Preservation Area Plan.

Council member Heather said she was not ready to approve the meal-tax portion of the package and asked that the council postpone the tax’s effective date by six months so any increase would not begin July 1 at the height of tourist season. She said the city is dedicating 0.77 percentage points of the restaurant meal tax to the Major Projects Fund and that the fund would also receive a transfer of 40% of Town Center TIF revenues. "I can just tell you I have so many questions about this major projects fund and the meal tax that I'm just not ready to vote to approve this tonight," Heather said.

Heather asked that the $200,000 shown in the budget for the ITA Athletic Village and Preservation Area Plan be used immediately for four short-term, low-cost actions identified in an earlier plan briefing — including a 5K practice course and temporary cross-country trails at Athletic Village East — rather than held as an open-ended economic-impact study. She also urged the council to retain all nine branch services coordinator positions in the public library system and avoid eliminating customer-service positions.

City staff member Armijo addressed legal and fiscal questions about the Town Center TIF and the referenced $1,000,000 declaration of surplus for the TIF fund. Armijo said the council retains discretion to reassign TIF revenues because the city has not issued TIF bonds that would legally restrict use of the funds, and that the $1,000,000 declared surplus in the published budget is a one-time infusion meant to stabilize the special service district (SSD) while the SSD is trending downward.

Shannon Kelly, vice president of the Virginia Symphony Orchestra, briefed the council during public comment and thanked the council for increasing the symphony’s regional grant for the coming season. Kelly said the orchestra reaches "approximately 5,000 students every year in Virginia Beach" through education programming and announced the organization will secure administrative office space in Virginia Beach starting next season. A remote commenter criticized proposed tax increases, saying, "You raise my taxes, you lose my vote."

Vice Mayor Wilson and other proponents highlighted public-safety investments in the package. Wilson said the budget adds 30 new firefighters, includes a substantial pay adjustment for public-safety personnel following a market-salary survey, and increases funding for fire apparatus from $2,000,000 to $10,000,000. The budget dedicates a portion of the meals tax to public safety under the Major Projects Fund.

The council also approved ordinances to (among other items) establish the real-estate and personal-property tax levies for FY2026, submit the annual HUD funding plan, amend multiple City Code sections (including tax-exemption and short-term rental permit provisions), adopt the FY2026–FY2030/31 CIP and to authorize up to $72,827,365 in general-obligation public-improvement bonds and other revenue bonds for flood protection, stormwater, and water/sewer projects.

Council member Jennifer disclosed a conflict of interest before the vote, saying she works for TCC and that a disclosure letter was filed with the city clerk.

By a vote of 10–1, the council approved the operating and CIP budgets as presented. Heather announced she would vote against the package. The adoption takes effect for the fiscal year beginning July 1, 2025; the meal-tax timing and the dedicated Major Projects Fund remain subjects the council indicated it could revisit in future sessions.

The council’s action funds immediate public-safety pay and staffing changes and begins a multi-year capital program, while several council members and members of the public asked for follow-up work and clearer limits on how new and redirected revenues will be used.