VIRGINIA BEACH, Va. (WAVY) -- In order to help combat inflation in the coming fiscal year, the city manager is proposing several tax and fee rate increases, including placing a tax on pleasure boats. In a presentation to Virginia Beach City Council Tuesday afternoon, Budget Director Kevin Chatell ier revealed the FY 2025-2026 $2.8 billion budget plan had to take into account cost increases of 40% for some city initiatives. And while the real estate tax is recommended to stay the same at $0.97 per $100 of assessed value, Chatellier said it has recommended other taxes and fees be increased in order to continue to preserve and maintain existing services. The resurrected boat tax would be applied to anyone with a boat 18-feet or longer at a rate of $1.50 per $100 of assessed value. Chatellier estimates this would produce an estimated $4.3 million in yearly revenue that would go towards projects boaters use, such a dredged waterways. "Larger boats typically draw more water, driving more of the necessity for frequentdredgings to maintain navigable waterways," City Manager Patrick Duhaney wrote in a letter to City Council. If approved, this would actually be a return on the boat tax eliminated in 2002. Suffolk also taxes boats at the same rate. Duhaney's budget would also increase the meals tax by .5%, bringing a diner's full tax for a meal in Virginia Beach to 12%. A proposed fee increase is also included for the stormwater enterprise fund. The rate will go up 8.9 cents a day, working out to annual increase of $32, or around $2.70 per month. "Significant inflation on the cost of goods and services in the last six years, coupled with increased labor costs have substantially impacted the sustainability of the stormwater fund," Duhaney wrote. Balances to the budget have also been made by eliminating proposed Capital Improvement Projects (CIP). ...read more read less