Highlights of FY25-26 plan include real estate, personal property tax-rate cuts, continued investment in schools, safety and $50 million for water resiliency
Henrico’s proposed budget for fiscal year 2025-26 would reduce the tax rates on real estate and personal property, delivering to residents and businesses the county’s most comprehensive, permanent tax relief since 1987.
In addition, the budget would continue to strengthen Henrico’s investments in education and public safety; advance capital projects, including those identified with the voter-approved 2022 bond referendum; and provide an initial allocation of $50 million to make the county’s utilities system stronger and more resilient. The funding is designed to offer flexibility as officials consider options – both independently and regionally – to address challenges with water distribution that arose in early January when a shutdown of the city of Richmond’s water treatment plant caused widespread service outages in eastern Henrico.
“As a county, we’re committed to doing everything we can, as fast as we can, to provide a public water system that meets our community’s needs in the 21st century,” said Board of Supervisors Chair Dan J. Schmitt, of the Brookland District. “By including these funds in our budget and continuing to work with our Public Utilities staff and external consultants, we’ll be ready to take whatever steps are needed to ensure that the service disruptions of early last month never happen again.”
County Manager John A. Vithoulkas and other officials outlined broad themes of the budget at a briefing today – ahead of the plan’s formal presentation to the Board of Supervisors on Tuesday, March 11. Overall, the general fund budget totals $1.35 billion, an increase of 8% over the current year’s plan. Of those additional funds, 82% would support either education or public safety. Among other highlights, the plan would fully fund the request of Henrico County Public Schools and provide a 6% raise for employees of the county’s government and HCPS. It also would include targeted market adjustments for custodians, maintenance staff and instructional assistants.
“The budget we’re proposing for the upcoming year will continue to make Henrico County an outstanding place to live, work, operate a business and visit,” Vithoulkas said. “It will allow us to build on our strengths, particularly in education and public safety, and confront our challenges from pedestrian safety to water while also providing the most comprehensive and permanent tax relief to our residents and businesses since 1987. The proposed tax-rate cuts are accelerated from what we initially thought we might be able to offer and are targeted to benefit our entire community – approximately 115,000 homeowners, 320,000 vehicle owners and 20,000 businesses. We’re able to take these bold steps because of our vibrant economy, high-performing workforce and unwavering commitment to outstanding fiscal stewardship.”
As proposed, the real estate tax rate would be reduced by 2 cents, to 83 cents per $100 of assessed value. The current rate of 85 cents is already the lowest among Virginia’s large localities. Likewise, Henrico’s personal property tax rate would drop to $3.35 for both vehicles and business personal property. Those rates are currently $3.40 and $3.50, respectively.
Overall, the proposed budget would extend an estimated $18.3 million in new tax relief, which includes additional relief for older and/or disabled residents through the Real Estate Advantage Program and Real Estate Cap program. To partially offset those funds, the budget estimates an additional $13.6 million in revenue from a rate increase for a category of personal property tax that applies to data center computers and related equipment. Henrico created the special taxing category at 40 cents in fiscal 2017-18, which helped establish the county as a hub for data centers. Officials expect the industry to continue to flourish given the proximity of the Richmond Network Access Point and because the proposed tax rate of $2.60 would be lower than the state average of $3.09 and at least $1.00 less than the comparable rates of localities in northern Virginia. The adjusted rate for data center equipment would not impact Henrico’s affordable housing initiative because it’s funded through the real estate taxes associated with data centers.
The Board of Supervisors will hold a work session at 3:45 p.m. today to receive an overview of the proposed budget. The board will have four weeks to review the document following its presentation March 11. The board will hold legislative sessions March 17-21 to review each department’s budget in detail. A public hearing will be held at 5 p.m. Tuesday, March 25 in the Board Room at the Henrico County Government Center, 4301 E. Parham Road. Budget adoption is proposed for Tuesday, April 8. Once approved, the document will take effect for the year beginning July 1.
