2025 City of Suffolk Annual Comprehensive Financial Report

William Webb — Sun, 25 Jan 2026 15:50:37 +0000

The City of Suffolk’s recently released 2025 Annual Comprehensive Financial Report (ACFR) paints a picture of a municipality in a remarkably strong financial position. While the report was published without a public announcement just before the holidays, its contents are of significant public interest. City finances, with their various funds and activities, can be complex, but this analysis will highlight the key takeaways from the report. Specifically, we will examine the substantial budget surplus the city has accumulated for the second year in a row, how our tax rates and household tax burdens compare to the rest of the Hampton Roads region, the city’s extensive and largely untapped borrowing capacity, and whether our current economic development strategy is truly serving the best interests of Suffolk’s residents.

Some Highlights:

General Government (Police, fire, schools, roads, parks, libraries, etc.; services paid for via taxes): FY25 general revenues: $341.3 million vs. expenses: $212.5 million – net increase $128.7 Million (Surplus)

City’s business-type activities (Water, sewer, airport, refuse, etc.; services paid for via charges/fees): FY25 revenues: $95.8 million vs. expenses: $73.0 million & $1.5 million transfer to general fund – net increase $20.3 Million (Surplus)

“The City’s combined net position (which is the City’s “bottom line”) increased by $149.9 million in fiscal year 2025” (Pg. 8 of ACFR). For FY2024, the City’s “bottom line” increased by $133.8 million.

Over the past two years, the City has increased its “bottom line” by $283.7 Million.

The Mayor doesn’t really like when I talk about the “budget surplus”, so I made sure to double-check the definition. According to Investopedia.com: “a budget surplus occurs when a business or government’s revenue exceeds its expenses during its fiscal year.”

According to the ACFR, page 9, heading “Excess of revenues over expenditures”, the City had a $150 million surplus, with $100,000 being transferred to a different account, for the $149.9 million “Change in net position.” This came from total revenues of $544.5 million vs. total expenses of $394.5 million. If this doesn’t meet the definition of “Budget Surplus”, I am not sure what would.

For context, every 1 cent of the Real Estate tax equates to around $1.66 million ($177,492,532 ÷ 107 = $1,658,809). A 10 cent reduction would cost around $16.6 million, which is barely over 10% of the overall budget surplus from last year. I think it is time that the City lowers our tax rates.

And before anyone tries to claim that Suffolk has the “3rd lowest rate in the area”, Suffolk actually ranks 5th highest for Real Estate Tax Rate out of the 22 areas that make up the Hampton Roads Metropolitan Statistical Area (MSA), which is how the Census defines Hampton Roads.

Furthermore, when you apply the tax rate to the average assessment, the Median Household in Suffolk pays $3,836 per year, which ranks 2nd highest in the MSA. The only locality that pays more per household is Poquoson, which comes in at $4,214.

The regional average real estate tax rate is $0.85 per $100, with the Statewide average being $0.94 per $100. Virginia Beach is at $0.97 per $100, while Chesapeake is $1.01 per $100. Smithfield comes in at $0.935 per $100, while Isle of Wight is $0.775 per $100. With the City running an annual budget surplus over $100 million for each of the past 2 years, it is about time we lower the rate and help out our local residents.

In regards to the City’s debt and borrowing capacity, the state allows a locality to borrow up to 10% of the assessed value of taxable real property within the locality. Suffolk has imposed a lower threshold, allowing borrowing up to 7% of the assessed valuation. The City currently has $768.5 million in available “credit” when looking at the City’s imposed limit and $1.29 billion in available “credit” when comparing to the state threshold. (ACFR Pg. 53)

So what does that mean? We could build 4 new King’s Highway bridges and still have credit left over. We could build a new high school, two new middle schools, and 5 new elementary schools and still have over $250 million in borrowing capacity available before we bumped up against the City’s self-imposed limit. The City has plenty of money and even more “credit” it could put to work. So why do we have kids learning in trailers? Why do we have overcrowded classrooms? We have the money; let’s put it to work.

Looking at Economic Development in the City in FY25, the statistics are interesting. I sit on the City’s Economic Development Authority and I have been advocating for diversifying our economic roadmap and ensure we aren’t putting all of our eggs in one basket. According to the report, a warehouse produces 1 job for every 18,590 sqft of building. For comparison, Medical Offices are coming in at 1 employee per 140 sqft of building, while retail added 1 employee per 270 sqft of retail space. Advanced manufacturing came in at 1 employee per 3,835 sqft of building space. So these warehouses are bringing the traffic and congestion but producing very few jobs for the space.

The Mayor likes to discuss the capital investment of the warehouses. According to the report, Advanced Manufacturing brings in $691 of capital investment per sqft of building, Medical Offices brings in $429 of capital investment per sqft of building, Retail brings in $321 of capital investment per sqft of building, and warehousing only brings in $70 of capital investment per sqft of building. While no one wants to see a loss in farmland and open space, if we are going to have some development, shouldn’t we be focusing on areas that bring the most bang-for-our-buck?

Lastly, as this is something that has stood out to me for a while but I haven’t heard any elected officials discuss, Suffolk has seen a sizeable swing in our median household income over the past decade. We have seen a -$10,955 swing vs. the state median household income over the past 10 years.

According to the City’s budget documents and US Census Bureau, in 2014 Suffolk had a median household income of $66,085 vs. $63,907 for the entire state, resulting in a net of +$2,178 per household. In 2024, Suffolk had a median household income of $81,154 vs. $89,931 for the entire state, resulting in a net of -$8,777 per household.

In short, Suffolk families aren’t keeping pace with our peers across the state and region. While prices have continued to increase, our take-home wages continue to stagnate. We aren’t attracting the employers and industries that will provide a thriving middle-class for our City. We must do more to diversify our economy and attract the careers that will keep pace with the rising costs in our region.

In summary, the data presented in the City of Suffolk’s own financial report reveals a clear and compelling narrative. With a combined surplus of over $283 million in the last two fiscal years, significant untapped borrowing capacity, and real estate tax burdens that are among the highest in the region, the argument that the city cannot afford to provide tax relief or increase investment in critical services like education falls flat. Furthermore, the city’s economic development focus on warehousing appears to yield a low return on investment in terms of both jobs and capital, while household incomes in Suffolk are alarmingly failing to keep pace with the rest of the state. The time has come for a fundamental re-evaluation of our fiscal and economic priorities. We have the financial resources and the borrowing power to lower the tax burden on our residents, invest in our schools, roads, and greenspaces, and strategically attract diversified industries that will build a prosperous future for all of Suffolk. It is not a question of capacity, but of political will.

Median Household Income – Care4Suffolk

2025 City of Suffolk Annual Comprehensive Financial Report