Fiscal 2026-27 plan retains 83-cent real estate tax rate and advances bond referendum projects, water system improvements
Henrico County’s proposed budget for fiscal year 2026-27 targets investments in core priorities – specifically education, public safety, facilities and infrastructure – while bracing for a cooling real estate market and cuts in state funding for schools. Despite these challenges, the proposed budget increases funding for schools by over $25 million, with 97.9% of that increase coming from local revenues.
The Board of Supervisors received the budget Tuesday and will review the budgets of individual departments and agencies in legislative sessions scheduled from March 16-20. A public hearing is scheduled for 5 p.m. Tuesday, March 24 in the Board Room at the Henrico County Government Center, 4301 E. Parham Road. The budget is scheduled for adoption Tuesday, April 14 and will take effect for the year beginning July 1.
Overall, the $1.4 billion plan represents an increase of 3.3% over the current year’s plan. Of those additional funds, about 83% support education and public safety. All tax rates would remain unchanged. The real estate tax rate was reduced by 2 cents last year to 83 cents per $100 of assessed value and is the lowest among the 10 largest localities in Virginia.
“The proposed budget we’ve presented is structured to continue Henrico County’s progress while respecting the challenging economic realities and uncertainties that we now face,” County Manager John A. Vithoulkas said. “We’re concentrating new investments in education and public safety, supporting our employees, enhancing services to promote youth mental health and honoring the commitments we’ve made to reinvest in our school buildings, other facilities and our public water system. To get us to a balanced budget, we have re-examined all that we do and identified nearly $59 million in savings and other efficiencies. Included in the savings strategies is a reduction target for each department – an amount equal to 3% of their approved budget for fiscal year 2026 – that has resulted in savings of $39.8 million. These cost-cutting efforts will continue in the months and years ahead through our Fiscal Wellness Committee.”
In a letter introducing the budget, Vithoulkas noted that the county’s fiscal outlook is far less rosy than it has been in recent years, due to a cooling real estate market and a reduction in state funding for education. Under the governor’s proposed two-year budget, Henrico’s share of state Aid to Local School Divisions is set to drop by nearly $1.5 million, to $448.4 million, while comparable localities, including Prince William and Chesterfield, would see funding increases worth tens of millions of dollars.
Among other highlights, the budget concentrates investments in key areas.
- Compensation: The budget recommends a 3% merit-based salary increase for employees of the county’s general government and Henrico County Public Schools. In addition, the county is covering the vast majority of the increased costs of employee health care premiums. The budget also includes an additional $3.2 million for overtime costs of public safety personnel.
- Education: The proposed general fund budget for Henrico County Public Schools totals $789 million. This is an increase of over $25 million, of which 97.9% will come from local funding sources. The budget provides operating support with the expected completion of four major capital projects: a renovation of Adams Elementary, a replacement building for Jackson Davis Elementary, a replacement building for R.C. Longan Elementary and the opening of the Environmental Education Center Living Building at Wilton Farm. Funding is also provided for additional English Language Learner teachers, special education teachers and instructional assistants, as well as mechanics and staff for the Cybersecurity Specialty Center at Henrico High School.
- School capital projects: The budget would provide $84 million for school capital projects, with $20 million for mechanical improvements to address issues with air conditioning and heating systems that have persisted at certain schools. Funding also would advance projects that were promised with the 2022 bond referendum, specifically $40 million for the construction of an elementary school in the Fairfield District and $6 million for planning and design of a replacement school for Highland Springs Elementary.
- Public Safety projects: The budget would support $41.8 million in capital projects for public safety agencies, including $27 million for a Public Safety Training facility, $6 million for maintenance at Jail West and Jail East plus funds for the scheduled replacement of vehicles and equipment for the Police and Fire divisions.
- Water and sewer capital projects: The budget would support $134.9 million in water and sewer capital projects, including a second allocation of $50 million for water distribution system improvements to ensure reliability across the county’s system. The project is designed to address challenges that arose in January 2025, when a shutdown of the city of Richmond’s water treatment plant caused widespread service outages in eastern Henrico.