Virginia Beach’s Financial Stability Declines, Earning a “B” Grade

Virginia Beach’s financial condition worsened in fiscal year 2023, but the city maintained a $4.3 million surplus. This equates to a Taxpayer Surplus™ of $25, earning Virginia Beach a “B” grade and keeping its classification as a “Sunshine City” in Truth in Accounting’s latest report.

The city’s financial decline was driven by rising pension liabilities, despite revenues exceeding expenses. Real estate tax revenues increased by $50 million, reaching $683.1 million, making up 42% of total city revenues. This revenue boost helped sustain essential services and obligations, including contributions to the Virginia Retirement System (VRS).
Virginia Beach’s growing pension liability stems from higher estimated accrued benefits in VRS, influenced by actuarial adjustments related to inflation, healthcare trends, and mortality rates. While the city remains financially stable, managing these rising pension obligations will be essential for maintaining long-term fiscal health.
Key findings from the report include:

• Virginia Beach had $1.734 billion available to pay $1.729 billion in bills.
• The city’s financial surplus amounted to $4.3 million, equating to a $25 Taxpayer Surplus™.
• Rising pension liabilities remain a concern, despite higher real estate tax revenues.

Virginia Beach must continue strategic financial planning to balance revenue growth with rising obligations while ensuring the sustainability of essential services and infrastructure investments.
For those interested in a deeper dive into Virginia Beach’s finances—and how it compares to other major U.S. cities—you can read the full Financial State of the Cities 2025 report here.