Budget Talk: What are TIP and TAP?

As the City of Virginia Beach’s budget season kicks into high gear in February with presentations on real estate assessments and needs for the Virginia Beach City Public Schools (VBCPS), you might hear some unfamiliar terms, such as the "TIP fund” and “TAP fund.” Let’s break down these tourism-related programs. 

Tourism is booming in Virginia Beach. The city welcomed 14.1 million visitors in 2023, who spent, on average, nearly $7 million each day, according to a recent economic impact study done for the Virginia Beach Convention & Visitors Bureau (CVB). Total visitor expenditures reached $2.5 billion, a $100 million increase over 2022.  

Because the city gets so many benefits from tourism, the City Council has made it a priority to continue to improve the city’s appeal to visitors. The Tourism Investment Program (TIP) and Tourism Advertising Program (TAP) are two ways to help accomplish this by providing additional funding from a dedicated portion of certain local taxes.  

Tourism Investment Program (TIP) 

City Council created the TIP fund in May 2011 by merging the existing Tourism Growth and Improvement Fund and the Major Projects Fund. Percentages of the hotel tax, meal tax and amusement tax, as well as specified amounts of the hotel flat tax and cigarette tax are dedicated to this program. It is used to pay for operating expenses and capital projects for strategic tourism-related growth and economic development.

Some examples of current projects funded by the TIP program, either in full or in part, include the Beach Ambassador Program, the Resort Area lifeguard contract, and Hampton Roads Transit. Total estimated revenue for the TIP fund in FY 2024-25 is $56,130,125, including the use of $2,399,774 in fund balance. 

Tourism Advertising Program (TAP) 

The Tourism Advertising Program was established in 1995 to generate revenue for tourism advertising as well as operation of the Visitor Information Center. This program is funded through a flat tax charge per hotel room night and a percentage of the hotel percentage tax and the restaurant meals tax. In FY 2024-25, TAP Fund revenue is estimated to be $18,198,103.

The Virginia Beach Advertising Advisory Committee (AAC) reviews the City’s advertising programs and marketing strategies and recommends advertising and marketing initiatives for the CVB to increase tourism in the city. 

For more information about the TIP and TAP programs, as well as a glossary of other budget terms used in Virginia Beach, check out the most current approved City operating budget. 

Growing Virginia Beach's Appeal to Visitors: In 2023, 14.1 million visitors spent $2.5 billion in Virginia Beach, which included local taxes on hotels, meals, amusements, restaurants and cigarettes. Through the Tourism Investment Program (TIP) and Tourism Advertising Program (TAP) funds, the City dedicates a portion of these local taxes to tourism-related growth, development and advertising. 

Next Steps in the FY 2025-26 Budget Process 

• February: The City Council and the public receive the annual report of real estate assessments for FY 2025-26 from the City real estate assessor. The VBCPS superintendent will present to the School Board a proposed estimate of needs. VBCPS holds workshops and public hearings before its budget is adopted by the School Board. 

• March: The VBCPS budget request is approved by the School Board in March, and the city manager presents the combined proposed operating budget of both the City and VBCPS to City Council on March 25. The proposed budget is available for the residents to view at public libraries, City Hall and online at budget.virginiabeach.gov.

• April:  City Council hears from individual department heads on their departmental budgets. Two public hearings provide residents an opportunity to comment on the proposed budget. 

• May: The reconciliation workshop is a week before the state-mandated deadline of May 15 for the budget to be adopted. This workshop is for the City Council to finalize the budget. This year the budget is scheduled to be adopted on May 13, 2025.  

Learn more by visiting budget.virginiabeach.gov. Watch the City Council meetings and be prepared to provide your input on the proposed budget in April. Subscribe now to get updates on the City’s budget process and how you can provide your input before major decisions are made.