Roanoke leaders review budget shortfalls and consider a 1% meals tax, sales-tax referendum for school construction

Roanoke City Council and the Roanoke City School Board heard detailed budget briefings at a joint meeting where school and city leaders described growing operating and capital gaps and discussed potential new local revenues.

Superintendent Dr. White, Roanoke City Public Schools, told the joint session the division faces rising student needs — including an increase in students needing English‑learner services from about 1,094 in 2019 to roughly 2,340 now, and McKinney‑Vento homelessness counts that have grown from roughly 300 in 2019 to “upwards of almost 700.” She said about 65% of students live in households classified as economically disadvantaged. Those shifts, she said, increase recurring costs at the same time the state has reduced some grants: “We are already expecting to need to cut $2,000,000 from the budget,” Dr. White said, and the division may face a nearly $7,000,000 shortfall if the city provides only level funding rather than increases tied to needs.

City Manager Val Marie Turner outlined parallel pressures on municipal finances, citing inflationary contract and utility cost increases, rising jail medical costs and deferred capital maintenance. Turner said the city projects roughly $23.2 million in incremental revenue for fiscal 2026 but that those funds are largely committed to competing obligations; she noted several hundred city employees make below a livable wage and that elevator and other deferred maintenance needs alone total multiple millions of dollars.

David Rose of Davenport Public Finance presented several funding options staff and advisers have modeled. Rose said a one‑percentage‑point increase in the local meals tax (now 5.5% in Roanoke) would be roughly $4 million a year and could be dedicated to pay debt service for a short-term line of credit to cover urgent deferred maintenance, then transition to a cash-funded program. He said a state‑authorized local‑option sales tax of up to 1% — which requires voter approval where used — can generate substantially more revenue but must be dedicated by law solely to school construction if used that way. “If we did something like this, and it would be what we call a drawdown line of credit ... the debt service we pay for from that $4,000,000,” Rose said.

City and school leaders emphasized tradeoffs. Dr. White urged continued partnership and warned that some responses to lower revenues would be deeply consequential for classrooms and services: “Dedicated funding creates stability in the organization,” she said. Turner described the year ahead as “a very, very difficult budget year,” and asked council and the school board to continue monthly leadership coordination while officials finalize numbers for the March budget schedule.

The presentations and follow‑up questions left several items unresolved but defined the policy choices: (1) pursue a city council action to dedicate existing or newly raised local revenue (such as a meals tax increment) to capital and deferred‑maintenance needs; (2) pursue a voter referendum for a local‑option sales tax dedicated to school construction; (3) pursue a mix of short‑term borrowing and dedicated revenues to spread the cost without immediate general‑fund transfers. Officials said staff will return with detailed cost estimates, timing and draft ordinance language if council requests it.

Ending: Officials scheduled additional briefings and said a recommended operating and capital budget will be released later in the budget calendar; no final funding decisions were made at the joint meeting.