Rockbridge County supervisors weigh tax increases, cuts to close $708,709 FY26 budget gap

Rockbridge County Board of Supervisors members on Monday reviewed a draft FY2026 budget that staff said carries a $708,709 gap and debated options to close it, including cuts, modest tax increases and use of cash reserves. The board did not adopt a budget and set deadlines for further review and a finance-committee meeting ahead of a planned April 14 advertisement and an April 28 public hearing.

Ashland Harrison, the staff member who presented the memo, told the board “the current draft before you … has a budget gap of negative $708,709.” He said total estimated revenues are $64,091,878, including $4,626,299 in planned use of reserves for capital projects and restricted reserves from EMS recovery fees; total expenses in the draft were $64,800,587. Harrison said the draft includes $3,913,796 for capital projects and that the county is estimating a 97% collection rate on property taxes.

The session focused on three broad levers to close the shortfall: cuts to departmental or discretionary spending, increasing revenues through tax rate changes, and using fund balance for one-time capital needs. Supervisors discussed examples and trade-offs rather than taking formal action. Supervisor McDaniel suggested a larger tax increase (an 8¢ increase on the real-estate rate was discussed as an example), while other supervisors urged more targeted cuts or a smaller rate change (one supervisor suggested 1–2¢). No final rate change was proposed or adopted at the meeting.

The draft retains the current personal property tax rate at $4.25 and machinery & tools at $2.55; Harrison said a 1¢ change in the real property tax rate is estimated to generate $326,571. He also noted that a 1¢ change in the personal property rate equals about $26,002.45; a hypothetical increase from $4.25 to $4.50 (a 25¢ increase on personal property) would generate roughly $650,000 in revenue, the presentation said.

On compensation and operating costs, the draft includes a proposed 3% raise for all county employees, an additional 10% raise for fire and rescue personnel, and a proposed 1.5% bonus for constitutional officers and their employees (the memo said that bonus is being included in the draft because the board expects similar action in the General Assembly and by the Compensation Board). The county also plans a new bond payment of $239,635 for a social services building. Harrison reported the health-insurance estimate was unchanged from the current year.

Board members reviewed capital requests and recommended provisional CIP adjustments the finance committee will consider. Items listed in the draft and discussed included $3,088,244 for provisional CIP projects, $34,282 for Rockbridge Regional Library capital work, $560,000 to buy four school buses, $231,270 for central-dispatch capital purchases, $171,625 for courthouse security upgrades, and a $1,774,300 cash match for a broadband build with Brightspeed. Harrison said an agreement related to the broadband rescope will arrive from the Virginia Department of Housing and Community Development under the Virginia Telecommunications Initiative (VATI) and that Brightspeed plans to update the board in April.

Supervisors also discussed nonprofit funding: staff said noncontractual contributions total $219,479. Board members debated whether to reduce or eliminate some noncontractual contributions and asked staff to provide line-item dollar amounts so the board can understand the savings impact of reductions.

Harrison and supervisors emphasized the county’s reserves in the discussion. The draft showed a 20% reserves target of $16,656,867; unassigned reserves at the end of FY2024 were reported as $28,000,000. Several supervisors said they did not want to rely on reserves to fund recurring operating costs, and they discussed protecting fund balance for one-time capital uses.

The board set procedural next steps: supervisors asked non–finance-committee members to submit recommendations by close of business Monday, April 7, so staff can consolidate proposals for a finance-committee meeting on Wednesday, April 9. The board’s next regular meeting is April 14, when staff said it will request authorization to advertise the budget; a public hearing is scheduled for April 28 and adoption is expected in May if the schedule holds. The meeting ended without a budget vote; the only formal action recorded was a motion to adjourn, which carried.

Why this matters: the draft budget determines local tax rates, employee pay and funding for schools, public safety and capital projects. Supervisors flagged trade-offs between protecting reserves, maintaining services and limiting tax increases, and they scheduled a short window of committee work and board review before the advertised public hearing.