The Albemarle County Board of Supervisors expects its expenditures to outpace revenue over the next five years and considered at its Wednesday meeting how taxes might close the gap.
“If the community wants certain things, and the expenditures are clearly outrunning that… Then we have to find the money,” said Rio District Supervisor Ned Gallaway during the meeting.
The county’s five-year financial plan outlines what the board assumes it will spend and earn in tax revenue based off of previous years’ revenue and spending. The board believes that both revenue and expenditures will trend upward in the future.
The five-year plan helps shape the annual budget, making sure the county spends money on the goals it prioritizes in its strategic plan.
Expenditures will hit just below $470 million by fiscal year 2028, if the county’s office of management and budget’s predictions are accurate. That will cause the county’s budget deficit to balloon from $6.7 million to $28.9 million. It’s hard to know exact numbers, but the projections give supervisors an idea of the future.
Earlier predictions, which covered fiscal years 2023-2027, anticipated less spending and lower deficits. Last year’s long-range plan had the 2027 deficit at $6.5 million; the current plan puts it at $28.4 million. Some of that increase is driven by inflation. Part of it is a result of the board taking on new projects and offering more services.
Spending has to increase for the board to accomplish what it seeks to do, supervisors agreed during their Wednesday meeting. But closing the gap between revenues and expenditures requires levying higher taxes.
The county’s authority to impose taxes is limited by the fact that it does not have taxing authority. Instead, it has to ask the Virginia General Assembly for permission to impose new taxes on its residents. The county can increase existing taxes, but some of those, like meals taxes, have limits.
“I see no way that we can close that gap without looking at an increase in our real estate property taxes,” said Supervisor Donna Price, who represents the Scottsville district. “I think it’s fair, I think it’s just.”
The county can increase real estate taxes without approval from the state government, but it hasn’t done so since 2019. The current rate in Albemarle is 0.854%, while in Charlottesville real estate is taxed 0.96%.
Price thinks that’s an issue, considering Albemarle County’s population is more than double Charlottesville’s.
“Historically, counties are rural,” Price acknowledged, but said that Albemarle County is increasingly urban and offers services more equivalent to what Charlottesville provides. She said the board “needs to find a balance … that allows us to provide the services that our residents not only expect, but they deserve.”
The county will likely increase wages for its staff, pending the results of a classification and compensation study, as part of its effort to recruit and retain excellent employees. Other jurisdictions in the area are conducting their own reviews of employee wages. That will push spending up in Albemarle too.
“I’m not interested in being at market from an employee wage standpoint, because I don’t think we’re at market for what our expectations are,” Gallaway said. “I’m not ready to say ‘Well, let’s bring back our expectations.’”
Other projects in the five-year financial plan include renovating the Charlottesville-Albemarle Regional Jail, implementing the Climate Action Plan and improving transportation in the county. These are aligned with the county’s goals of nurturing a safe and healthy community, promoting community engagement and providing more economic opportunities.
The board also allocates funding for Albemarle County Public Schools, which has its own long-term planning to consider. The county has adopted the schools’ capital improvement plan, which asked for money to add new classrooms to Mountain View Elementary School. County schools will also build two new elementary schools and renovate other schools.
Albemarle County schools’ next capital improvement plan will likely include a request for money so that it can make an offer on Charlottesville-Albemarle Technical Education Center, which it currently co-owns with the city.
The board must plan for contingencies too, like a pandemic or economic crisis, the supervisors noted.