04052011 REVENUES PRESENTATIONFY 2011-12 Revenue Summary
April 5, 2011 Update
The recession ended
in June 2009
. . . but recovery is slow.
2
February 2011 Unemployment
10%
9.0%
8.9%
8.9%8.9%
8.6%
9%
8%
7.3%
6.9%
6.8%
6.4%
7%
6%
5%
4%
3%
2%
1%
0%
3
Source: Bureau of Labor Statisticeand Virginia Employment Commission
Consumer Confidence
160
> 90 indicates
140
stableeconomy
120
100
90
80
60
50
40
< 50 indicates
20
contracting economy
Low Point: February 2009 –25.3
0
990000010102020303040405050606070708080909101011
------------------------
JulJanJulJanJulJanJulJanJulJanJulJanJulJanJulJanJulJanJulJanJulJanJulJan
4
Source: The Confidence Board
Foreclosures in Virginia Beach
1,800
1,600
1,400
1,200
# Units
1,000
800
600
400
200
0
Calendar Year
5
Economic Indicators
$16
$14
$12
$10
Millions
$8
$6
$4
$2
$-
Jul 99Jan 00July 00Jan 01July 01Jan 02July 02Jan 03July 03Jan 04July 04Jan 05July 05Jan 06July 06Jan 07July 07Jan 08July 08Jan 09July 09Jan 10July 10
6
General SalesRestaurant MealHotel
Comparison of Average and Median
Residential Assessments
$400,000
$ 279,700
$350,000
$300,000
$250,000
$200,000
$150,000
$ 230,900
$100,000
$50,000
$0
04-0505-0606-0707-0808-0909-1010-1111-12
Average ResidentialMedian Residential
Average assessment change from FY 2011 is -3.09%
Average residential assessment decreased3.34%
•
Average commercial assessment increased0.92%
•
7
Real Estate Tax
$550
$500
$450
Millions
Without the rate increase, FY 2012
$400
would be below FY 2007 actual
collections. Even with the rate
$350
increase, it’s less than FY 2008.
$300
FY 2006 FY 2007FY 2008FY 2009FY 2010FY 2011FY 2012
At the current rate of 89¢, total real estate
•
revenue is $13.7 million less in FY 2012 than
8
FY 2011.
Personal Property
$140
$135
$130
$125
Millions
$120
$115
$110
Personal Property would grow about 4%
without a rate increase or machinery & tools
$105
elimination. It rises 7% in the FY 2012 budget.
$100
FY 2006FY 2007FY 2008FY 2009FY 2010FY 2011FY 2012
Eliminating Machinery & Tools Tax reduces Personal
•
Property almost $1.7 million.
The 20¢ rate increase generates $5.2 million in FY
•
2012.
9
General Sales
$60
$56
Millions
$52
$48
$44
$40
FY 2006FY 2007FY 2008FY 2009FY 2010FY 2011FY 2012
General Sales: Slight increase since September
•
4.7% revenue increase from FY 2011 totaling $2.4 million
•
10
Total Utility Taxes*
$55
$50
$45
Millions
$40
$35
$30
$25
FY 2006FY 2007FY 2008FY 2009FY 2010FY 2011FY 2012
3.4% revenue decrease from FY 2011 totaling $1.6 million
•
“Utility tax” is paid on electric, gas and water for residential and
•
commercial properties
* Represents Utility Tax, Electric and Gas Consumption and VA Telcom taxes combined.
11
Business License
$46
$44
$42
$40
Millions
$38
$36
Without exempting new
businesses, BPOL would grow
$34
2.6%. The revenue declines
$32
2.3% with the exemption
.
$30
FY 2006FY 2007FY 2008FY 2009FY 2010FY 2011FY 2012
The BPOL tax trend is growing. The red line above shows where
•
revenues would be without the exemption for new businesses
The exemption is estimated to be a $2 million annual impact, so FY
•
12
2012 is declining $0.92 million
Cable Franchise
$8
$6
Millions
$4
$2
$0
FY 2006FY 2007FY 2008FY 2009FY 2010FY 2011FY 2012
Revenue growth defies conventional wisdom regarding
•
market saturation and reductions from economic choices
for discretionary spending
Total revenue is increasing 7.2% over the FY 2011 budget
•
13
City-School Revenue Sharing Formula
Revenues
FY 2010-11FY 2011-12 Budget
BudgetCitySchoolsTotal
Real Estate$ 473,644,801 $ 242,669,528 $ 227,490,472 $ 470,160,000
Personal Property118,574,74464,472,13862,426,620126,898,758
General Sales50,596,24525,790,71227,167,62852,958,340
Utility Taxes47,253,21925,289,01120,372,29645,661,307
Business License40,771,64419,403,31820,439,22439,842,542
Cable Franchise6,538,9433,415,0213,597,3427,012,363
$ 737,379,596 $ 381,039,727 $ 361,493,583 $ 742,533,310
The local contribution to Schools is decreasing 1.2% in
•
FY 2012, which is primarily attributable to decreasing
real estate assessments, the elimination of the tax on
Machinery & Tools, and the new business exemption
14
Cigarette Tax
$13.0
$12.5
$12.0
Millions
$11.5
$11.0
$10.5
$10.0
FY FY FY FY FY FY FY
2006200720082009201020112012
Cigarette Tax is on the decline, despite a 6.6% rate
•
increase in FY 2011
7.4% revenue decrease from FY 2011 totaling $.94 million
•
15
Amusement Taxes
$8
$7
$6
$5
Millions
$4
$3
$2
$1
$0
FY 2006FY 2007FY 2008FY 2009FY 2010FY 2011FY 2012
6.3% revenue decrease from FY 2011 totaling
•
$0.36 million
* Amusement and Participatory Sports taxes combined
16
Hotel Tax
$26
$25
$24
$23
Millions
$22
$21
$20
$19
$18
FY 2006FY 2007FY 2008FY 2009FY 2010FY 2011FY 2012
Hotel tax and the flat rate tax show an 11% revenue
•
increase from FY 2011 totaling $2.5 million
Includes Hotel Tax and Hotel Flat Rate
17
Restaurant Tax
$54
$52
$50
$48
Millions
$46
$44
$42
$40
FY 2006FY 2007FY 2008FY 2009FY 2010FY 2011FY 2012
7.4% revenue increase from FY 2011 totaling $3.6 million
•
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Dedication of Local Taxes
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
City General FundSchoolsOther Dedicated
19
Charges for Services
$240
$220
The redline shows charges for
services without the garbage fee.
$200
$180
Millions
$160
The blueline shows charges for
$140
services without the storm
water rate increase.
$120
$100
FY 2006FY 2007FY 2008FY 2009FY 2010FY 2011FY 2012
Charges for Services are increasing by 7.2% in FY 2012,
•
and include increases in sewer, storm water, and parks
and recreation fees in addition to the proposed garbage
20
fee
Other Local Revenues*
$80
$60
Millions
$40
$20
$0
FY 2006FY 2007FY 2008FY 2009FY 2010FY 2011FY 2012
12.6% revenue decrease from FY 2011 totaling
•
$6.3 million
* Represents Bank Stock, Deeds, Wills, Use of Money and Property, Miscellaneous,
Permits, Fines
21
State and Federal Revenue
$600
$500
$400
Millions
$300
$200
$100
$0
FY 2006FY 2007FY 2008FY 2009FY 2010FY 2011FY 2012
StateFederal
State revenue is decreasing $3.8 million (0.8%)
•
Federal revenue is increasing $25.5 million (19.5%)
•
22
Fund Balance in Operating Budget
UseAmount
Construction &Start Up for Intermediate Care Facility $1,027,299
(General Fund)
School Reserve Fund$13,300,000
School TechnologyFund$8,125,463
School TextbookFund$8,490,000
Other SchoolFunds$1,015,433
DEA Forfeiture Fund for Commonwealth’s Attorney$200,000
Sheriff’s Department& InmateFunds$1,112,109
TIFs and SSDs$3,693,423
AgricultureReserve Program$1,595,132
Open Space Fund$1,087,857
TourismInvestment Program (Major Projects)$3,129,087
Water & Sewer Fund for WaterContract True Up (Prior $3,361,943
Years)
23
Comparison of Annual Tax Impact for Virginia Beach
From FY 2008-09 to FY 2011-12
FY 08/09FY 09/10FY 10/11FY 11/12
Real Estate Tax$2,308.66$2,201.86 $2,110.19 $2,100.28
Personal Property Tax210.90155.76157.75193.80
Electricity Utility Tax36.0036.0036.0036.00
Gas Utility Tax36.0036.0036.0036.00
VA Telecommunications Tax70.6870.6870.6870.68
Water Utility Tax36.0036.0036.0036.00
Restaurant Tax251.48251.48251.48251.48
Admissions Tax25.6925.6925.6925.69
Vehicle License Decal50.0050.0050.0050.00
Storm Water Utility Fee73.3780.6787.97115.34
Residential Refuse FeeNoneNoneNone60.00
Water & Sewer509.52529.69552.00582.96
Total Tax Impact$3,608.30 $3,473.83 $3,413.76 $3,558.23
Annual Change$0.00 ($134.47)($60.07)$144.47
Cumulative Change in Total Tax Impact ($134.48)($194.54)($50.07)
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Summary
Total City and School revenues are increasing
•
2.05%
City Operating Budget revenues are increasing 1.4%,
–
which is less than current inflation rate of 2.1%
School Operating Budget revenues are increasing
–
2.8%
49% of the Operating Budget revenues support
•
education
Some rate increases are needed to maintain
•
services, address backlogs or meet mandates,
including sewer and storm water increases,
garbage fee, and real estate and personal property
rate increases
25