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Hampton officials say growing disabled‑veteran exemptions are shaving millions from city revenue
Summary
City staff told the council the state-mandated disabled‑veteran real‑estate exemption has rapidly increased and disproportionately affects Hampton; staff estimate a multimillion‑dollar revenue loss that will complicate FY27 budgeting unless the state supplements localities.
City finance and revenue staff told the Hampton City Council at its budget retreat that a state policy expanding disabled‑veteran real‑estate tax exemptions has become a major, growing drain on local revenues. City staff said the overall program — now large statewide — has a particularly outsized effect in Hampton because of the city's unusually high veteran population.
"But Hampton, since it has a high concentration of veterans, we're one of the top 3 or 4 that's impacted the most," Commissioner of Revenue Michael Harris said, summarizing statewide and local trends. Harris walked council through the local options (freeze, deferral, grandfathered exemption) and the narrower, state‑mandated DV exemption rules that require a certified VA letter and 100% disability status.
Staff told the council they currently expect the local fiscal impacts to be in the millions — with projections that pushed FY27 losses into the low double digits of millions. The manager and commissioner said Richmond has considered working groups and other legislative measures but that meaningful fixes will be slow: changing the constitutional or statutory framework can take multiple election cycles. Councilors pressed staff on outreach and how deferred taxes are collected; Harris said deferred amounts accrue to estates and that the treasurer may need to sell property if estates cannot pay.
The discussion threaded into broader revenue planning for FY27: staff recommended factoring the exemption growth into tax‑rate stabilization calculations and urged continued lobbying at the regional and state level for supplemental support for disproportionately affected localities.
