City Council reviews tax rates amid budget implications for schools and services

Lynchburg City Council is grappling with significant budgetary decisions that could impact local services and tax rates. During a work session on June 24, 2025, city officials discussed various scenarios for the real estate tax rate, highlighting the potential consequences of each option on city revenue and staffing levels.

The city manager's proposed budget, based on an 89-cent real estate tax rate, aims to maintain current service levels while introducing a 3% cost of living adjustment for city employees and a similar increase for Lynchburg City Schools staff. However, if the tax rate is lowered to 86 cents, the city could face a $2.7 million reduction in real estate tax revenue, necessitating adjustments to programs, including a $500,000 cut to the elderly and disabled tax relief program.

Further reductions in the tax rate to 83 cents could lead to a staggering $5.4 million drop in revenue, resulting in the elimination of 32 positions across various departments. A more drastic cut to 76.7 cents could see an $11 million decrease in revenue, forcing the city to reconsider essential budget items, including the cost of living adjustments and public safety pay progression.

Council members expressed concerns about the implications of these cuts, particularly regarding the potential breach of contractual agreements with city employees. The discussions underscored the delicate balance between maintaining fiscal responsibility and ensuring adequate funding for essential services.

As the council continues to navigate these complex financial challenges, the need for a clear strategy to address revenue shortfalls while preserving community services remains paramount. The next steps will involve further deliberation on tax rates and potential adjustments to other revenue sources, as officials seek to align the budget with the city's priorities and commitments to its residents.