Charlottesville staff to advertise 2¢ real‑estate tax increase as part of FY2027 budget

Charlottesville staff presented the draft FY2027 general‑fund budget on March 5, saying it includes a proposed 2¢ increase in the real‑estate tax rate that would generate roughly $6.4 million more than FY2026 projections.

Chrissy (Presenter) told the council the draft general fund totals just over $279 million and that local taxes comprise about 70 percent of the revenue mix. “This budget does include a 2¢ real estate tax rate increase,” Chrissy said, framing the proposal within a package of revenue and expenditure changes that also reflect reassessments and inflationary pressures.

Staff asked the council whether to advertise that 2¢ rate for the formal public hearing process. An informal public comment opportunity was scheduled for March 16; the official advertised public hearing is set for April 6 (advertising deadline March 29), and the council is slated to adopt the budget on April 9.

Councilors debated alternatives to raising the tax rate, including drawing on one‑time surplus, shifting one‑time expenditures, and identifying additional internal cuts. Several councilors said they were “comfortable advertising for 2¢” as a preliminary step while directing staff to develop options to avoid or reduce an increase if feasible.

Staff emphasized the limits of using one‑time funds, warning that substituting reserves for recurring costs would deepen long‑term structural imbalance and could draw scrutiny from bond‑rating agencies. Chrissy told the council staff will produce a set of levers and quantified backup plans to show what reductions or reallocations would be required to avoid a rate increase.

Next steps: staff will post materials on the city budget web page, including a tax calculator, and return to the council with additional details and alternatives ahead of the advertised public hearing.

The meeting adjourned after a routine motion at the end of the work session.