FISCAL STRESS

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The fiscal stress index illustrates a locality’s ability to generate additional local revenues from its current tax base relative to the rest of the commonwealth. The three components are:

  1. Revenue capacity per capita (the theoretical ability of a locality to raise revenue)
  2. Revenue effort (the amount of the theoretical revenue capacity that the locality actually collects through taxes and fees)
  3. Median household income

Primary users of this index are local governments in Virginia and various state agencies, who use the index to assist in the allocation of state aid.

In response to the ongoing COVID-19 pandemic, staff at DHCD have identified and analyzed additional indicators that could be used in addition to the Fiscal Stress Index to identify where effects from COVID‐19 may be more pronounced. A copy of the report on this analysis is located below. Additional analyses on this and other related matters may be forthcoming and will be posted here when they become available.