State budget uncertainty could change Virginia Beach school funds; CFO flags $582.4 million boost in revised forecast

Crystal P., chief financial officer for Virginia Beach City Public Schools, told the board the fiscal year 2027–28 state budget had not been finalized and that negotiations in Richmond remained active. "The fiscal year 2027-28 state budget has not yet been finalized," she said, noting the General Assembly's June 30 deadline could force a temporary funding approach if lawmakers do not reach an agreement.

The division was briefed on Governor Spanberger’s updated revenue forecast, which Crystal P. described as projecting "approximately $1.5 billion in additional general fund revenue over the fiscal year 2026–28 biennium, including approximately $582.4 million in additional revenue for fiscal year 2027." That stronger outlook could give negotiators more flexibility, but staff emphasized the surplus is driven by volatile streams that could change with economic conditions.

Why it matters: VBCPS developed its adopted FY 2027 operating budget using the governor’s proposed recommendations; the district estimated roughly $19.7 million in additional state funding compared with FY 2026 under that proposal. Crystal P. said that as long as the final budget meets or exceeds the governor’s proposal, the division expects to remain in a stable financial position and not need significant midyear adjustments. She warned, however, that if the General Assembly fails to enact a full budget by the deadline, a "skinny" budget that funds only core services could constrain supplemental amendments and delay other funding decisions.

The CFO also called attention to retirement costs and VRS employer contribution rates used in the division’s planning. VBCPS built its FY 2027 budget using the lower VRS employer contribution rates approved by the VRS board of trustees; staff said they did not anticipate material impacts from current assumptions but will monitor guidance from the Virginia Retirement System and the Virginia Department of Education. The presentation noted a legislative concept that would allow localities to seek voter approval for an additional 1% sales tax dedicated to school construction; the measure had differing status between the chambers and is not reflected in the division’s current financial plan.

Next steps: Crystal P. said updated funding calculations will be released by the Virginia Department of Education once a final state budget is enacted and that staff will review any differences and bring recommendations to the board as needed. No formal board action was taken during the workshop.