Tax Relief for the Elderly and Disabled Program
What is the Tax Relief for the Elderly and Disabled program?
This program is designed to provide real estate tax relief for qualifying individuals. Basic qualifications include:
- Senior Citizens must be at least 65 years of age.
- Totally disabled individuals must be totally and permanently disabled - there is NO age limit - $10,000 income exclusion allowed.
- Partial or temporary disability - up to $5,000 of disability benefit excluded.
- Must reside in the Virginia Beach home, mobile home, or a convalescent facility.
- Annual household income must not exceed a maximum threshold for tax exemption.
- Assets must not exceed $350,000 (other than residence).
What are the proposed changes to the program?
The City's proposed budget includes modification of the qualifying income table for the Tax Relief for the Elderly and Disabled program by $5,000. Below is a comparison of what the income table is currently and what the income table would be through the proposed change:
| Existing |
$ - |
$47,100.00 |
100% |
|---|
| |
$47,100.01 |
$51,200.00 |
80% |
|---|
| |
$51,200.01 |
$55,300.00 |
60% |
|---|
| |
$55,300.01 |
$59,400.00 |
40% |
|---|
| |
$59,400.01 |
$63,450.00 |
20% |
|---|
| Reduced $5K |
$ - |
$42,100.00 |
100% |
|---|
| |
$42,100.01 |
$46,200.00 |
80% |
|---|
| |
$46,200.01 |
$50,300.00 |
60% |
|---|
| |
$50,300.01 |
$54,400.00 |
40% |
|---|
| |
$54,400.01 |
$58,450.00 |
20% |
|---|
How will this change affect the participants within the program?
If you are a current participant within the program, you can determine from the tables above if this change will affect you by reviewing your income as submitted on your State and Federal taxes and seeing where it fits in the tables above.
What if my income is over the new maximum allowable income of $58,450?
It is estimated that 365 existing participants will be omitted from the exemption program as a result of this change; however, the homes omitted should still be eligible for the Tax Deferral Program or the Tax Freeze Program. The maximum income allowed through these two programs remains unchanged at $67,000.
Why is the City changing the program?
Program costs have more than quadrupled in less than ten years and are anticipated to continually grow due to the City's aging population. The proposed change is an attempt to control these escalating costs and better align the City for a more sustainable future. Below are two tables that reflect participation in the program as it currently exists and what participation in the program would look like with the proposed change. The change omits 365 enrolled participants that make over $58,450 and reduces the overall program cost by $1.1 million.
Existing Program:
| 900,000-1,000,000+ |
7 |
2 |
0 |
0 |
0 |
9 |
$89,969 |
| 700,000-899,999 |
9 |
1 |
2 |
0 |
0 |
12 |
$82,988 |
| 500,000-699,999 |
72 |
5 |
3 |
3 |
8 |
91 |
$434,804 |
| 300,000-499,999 |
535 |
60 |
43 |
48 |
34 |
720 |
$2,196,238 |
| 100,000-299,999 |
5,249 |
388 |
319 |
312 |
246 |
6,514 |
$10,918,984 |
| 0-99,999 |
156 |
4 |
6 |
0 |
2 |
168 |
$131,067 |
| Total |
6,028 |
460 |
373 |
363 |
290 |
7,514 |
$13,854,050 |
Program with Proposed Change:
| 900,000-1,000,000+ |
7 |
0 |
1 |
1 |
0 |
9 |
$83,918 |
| 700,000-899,999 |
5 |
3 |
2 |
1 |
1 |
12 |
$69,329 |
| 500,000-699,999 |
61 |
11 |
3 |
5 |
3 |
83 |
$399,930 |
| 300,000-499,999 |
446 |
77 |
55 |
55 |
44 |
677 |
$1,977,306 |
| 100,000-299,999 |
4,583 |
606 |
362 |
332 |
319 |
6,202 |
$10,047,973 |
| 0-99,999 |
145 |
9 |
5 |
6 |
1 |
166 |
$126,530 |
| Total |
5,247 |
706 |
428 |
400 |
368 |
7,149 |
$12,704,986 |
Is Virginia Beach the only City experiencing high growth in this program's cost?
Although it is not known exactly what the cost increases have been for other localities, it is assumed they are experiencing similar increases. Recently the City of Norfolk restricted their tax exemption program for 100% exemption by limiting it to individuals making less than $28,611. Individuals making more than this amount are not eligible for tax exemption at all. Even with the proposed change, the City of Virginia Beach will continue to offer 100% tax exemption at the highest income level in Hampton Roads.
| Virginia Beach |
$0-42,100 |
100% |
| Chesapeake |
$0-22,000 |
100% |
| Norfolk |
$0-28,611 |
100% |
| Portsmouth |
$0-21,000 |
100% |
| Hampton |
$0-25,000 |
100% |
| Suffolk |
$0-41,479 |
100% |
| Newport News |
No Exemption |
|
Dredging
Why should the City's navigational program be supported by a boat tax?
Boating is at the very heart of our community, but the maintenance of navigation is a costly program, that arguably benefits a select group of citizens -- boat owners.
How has the City been able to provide navigational dredging for all these years without a boat tax?
In the past the City's program for navigation has been funded by general revenues. Our general revenue budget sources have been stressed in recent years, to the point where supporting maintenance of navigation at former levels is no longer possible.
Can't the City just reduce the level of service and avoid the need for a boat tax?
While our location is naturally conducive to boating activities, few, if any, of our channel systems would remain passable if not for periodic maintenance dredging.
What projects would be supported by the boat tax?
Nearly all of our waterways have required dredging in the past, or require on-going dredging programs to maintain navigation. These include: Rudee and Lynnhaven Inlets, the Easter and Western Branches of the Lynnhaven, Crab Creek, Long Creek Canal and Long Creek Proper, and the Narrows.
How much do those projects cost?
On an annualized, combined basis, the projects above require an average of more than $3M per year in City funding. (The Corps of Engineers is our cost sharing partner in Rudee and Lynnhaven Inlet management.)
Waste Management
Why should I have to pay a fee for waste collection?
Waste Collection is a core service with direct benefits to those single family, duplex, and townhome residents receiving the service. The Waste Management Fee is more equitable than the General Fund since business owners and multifamily residents contribute to the General Fund but do not receive City Waste Collection Services. Those that receive the service pay for the service.
Why increase the waste collection fee from $10/month to $13/month?
The fee increase continues to reduce the burden on the General Fund. In FY 2012-13 the $10 monthly fee generated $14. 8 million and paid for 46% of the net operating cost of the City’s $32.5 million Waste Management Program. In FY 2013-14 the additional $3 will raise the amount of the waste management fee paid by those who receive the service to $19.3 million. Our FY 2013-14 net program cost is projected to be $31.78 million. The fee in FY 2013-14 will now pay 61% of the Waste Management Program and the General Fund will still be responsible for 39%.
How does the City’s Waste Collection Fee compare to other Cities?
At the proposed $13/month level, Virginia Beach has the lowest Waste Collection Fee of all local Cities that are charging for the service.
Norfolk $26.64
Portsmouth $33.36
Suffolk $17.50
Hampton $17.00
Newport News $18.40-$23.00 based on container size
What would the Waste Collection Fee be if the program was fully funded by the fee for service?
The customer cost to fund Virginia Beach’s Waste Collection, Disposal and Recycling would be $21.36 per month based on 124,000 residences receiving the services. We do contend that a percentage of the program should still be funded by the General Fund as there are waste collection services that are provided to the public as a whole. If the Waste Management Program was funded at a ratio of 80% fee and 20% General Fund the FY 2013-14 monthly costs would be split $17.09 and $4.27 per residence serviced. These costs do not cover house hold hazardous waste drop off and landfill operations. These functions cost $2.9 million annually would be covered by the General Fund as well.
What is being done to control costs in Waste Collection?
We are committed to providing excellent service and continue to seek ways to be even more efficient and cost effective. By Improving the availability and use of our recycling services we not only help the environment, but also avoid unnecessary disposal costs. You can help making sure to use you’re blue cart or local drop off site for all recyclables. Metal recycling is also available at the Virginia Beach Landfill along with Household Hazardous Waste disposal.
By purchasing larger trucks, we’re able to reduce the number of automated trucks from 38 per day to 35 in FY 2012-13 and will be 32 in FY 2013-14. The routing changes were made using computer modeling as well as industry standards to ensure optimum performance. These changes avoid replacement, maintenance, and fuel for six trucks. Staffing was reduced by 3 FTE’s in FY 2012-13 and will reduce by another 4 FTE’s in FY 2013-14.
With 70 collection vehicles on the road each day making over 6 million collections each year, there is a potential for accidents. To address this potential, Waste Management has established written procedures, upgraded training, established operator certifications, conducts detailed accident and injury reviews, and conducts safety audits. These actions not only improve safety for the residents and our collections operators, they also result in cost savings by avoiding the fiscal impacts of accidents and injuries.
What is the spike in disposal cost coming up and why?
Virginia Beach currently has a capped tip fee rate of $65.35/ton of MSW (Municipal Solid Waste). The rate cap is part of the Ash and Residue agreement with SPSA which expires on December 31, 2015. When the agreement expires, Virginia Beach will pay the full tip fee amount of $125/ton and will no longer be reimbursed for the operating cost of the Virginia Beach Landfill. The impact of these changes is shown below:
| FY 2012-13 |
$65.35 |
$8,834,250 |
$0 |
$8,834,250 |
|---|
| FY 2013-14 |
$65.35 |
$8,834,250 |
$0 |
$8,834,250 |
|---|
FY 2015-16
Jul 1-Dec 31, 2015 - Jan 1-Jun 30, 2016 |
$65.35
$125.00 |
$12,860,625 |
$1,273,901 |
$14,134,526 |
|---|
| FY 2016-17 |
$125.00 |
$16,887,000 |
$2,547,802 |
$19,434,802 |
|---|
FY 2017-18
(Jul 1-Jan 24, 2018 - Jan 25-Jun 30, 2018 |
$125.00
$65.00* |
$12,837,000 |
$2,547,802 |
$15,384,802 |
|---|
How does the City plan to pay for the additional $16 million to $22.5 million in increased SPSA disposal costs from FY16 thru FY18?
It will require us to consider increasing both General Fund and Fee for Service funding for the Waste Management Program. Beginning in FY 2015-16, the total net annual program costs will increase from @$30.5 million to $35.8 million and in FY 2016-17 will surge to $41.1 million.
What’s happening with SPSA?
Although SPSA has continually provided reliable disposal services for the region, there have been substantial financial struggles. The sale of the Waste to Energy facility and changes in the administration and governing board has resulted in financial stability. All SPSA debt is scheduled to be retired when the current Use and Support Agreements expire on January 24, 2018. Given the reliability and value of existing infrastructure of the current disposal system, the lack of debt, and proven abilities of the current administration and board, regional leaders are currently pursuing an extension of the SPSA, or SPSA like, system.
What about Recycling Perks?
Recycling Perks is a program to encourage recycling by rewarding residents. Virginia Beach has evaluated the program and continues to monitor it. However, the current proposal for Virginia Beach does not provide sufficient benefit to justify the cost and to adopt would increase costs of the waste management program.
Why do we have a Landfill, what service are provided, and when will it be closed?
The Virginia Beach Landfill is a significant asset providing valuable service to the Citizens of Virginia Beach. It has significant capacity and is envisioned to be operational for the foreseeable future. In addition to disposal, services include Household Hazardous Waste Disposal (HHW), Metals Recycling, Electronics Recycling, Recycling Drop Off, Yard debris drop off and mulch operation, Concrete Recycling, and Oyster Shell Drop Off.
The cost and reliability of MSW disposal is a critical concern. Having disposal options is one of the keys to both reliability and cost control, and that is part of the value provided by the Virginia Beach Landfill. When the current Use and Support Agreements were negotiated, Virginia Beach also negotiated the Ash and Residue Agreements which provided SPSA disposal availability for WTE ash, SPSA pays the cost of the Virginia Beach Landfill, and a tip fee rate cap was established. These conditions allowed Virginia Beach to join the regional effort and still ensure that Virginia Beach residents recognize the value of the Virginia Beach Landfill ownership. Although originally envisioned as a cost neutral arrangement, the financial difficulties experienced by SPSA resulted in significant protection for the Virginia Beach residents which currently results in cost savings of $10.5M/year.
The Landfill is assessing their ability to provide drop off services for ceramic fixtures (sinks and toilets) and granite counter tops. Properly reduced and mixed with oyster shell the City is working with the Corps of Engineers to create oyster infrastructure in support of the Lynnhaven Basin Restoration Plan.