Henrico presents FY26 budget with 2¢ real estate rate cut, defers final adoption to April 8

Henrico County staff presented highlights of the county manager’s proposed fiscal year 2026 operating and capital budgets on Tuesday, March 25, outlining a $1.355 billion general fund and a capital program of more than $416 million that include proposed tax relief and new investments in schools and public safety.

The proposed budget includes a 2¢ reduction in the real estate tax rate and reductions in personal property tax rates, a proposed countywide 6% salary increase for eligible employees, and significant capital spending including nearly $200 million for water and sewer projects. County staff said education and public safety account for roughly 78% of the operating budget and that more than 82% of the general fund’s growth is dedicated to those two areas.

In presenting the plan, Mr. Crawford (presenter, county staff — budget office) told the board the general fund’s high-level revenue breakout shows real estate revenue making up about one-third of the county’s revenue and that capital funding sources include a mix of reserves and ongoing revenue. He said the personal property rate change would reduce the top personal property rate to $3.35 and estimated the personal property reductions would reduce bills for more than 300,000 vehicles and reduce business rates for roughly 20,000 firms. Crawford noted a data-center tax-rate normalization to 2.60 for tax year 2025 as part of the tax-relief package.

Crawford said the proposed capital budget includes construction funding for Firehouse 1 replacement, planning and site work for a new Fairfield Elementary School in the River Mill area, a renovated Virginia Randolph campus funded with nearly $5 million, and additional school roof and mechanical funding increased to $16 million in fiscal 2026. He described an almost $200 million water and sewer capital program and a multi-year initiative he described as a $50 million-per-year effort to support countywide drinking-water objectives. Sidewalk and bicycle-path funding would increase from $5 million to $7.75 million annually, and the budget would add $1.5 million for the county’s street-lighting initiative.

At the meeting the county manager and staff also noted a targeted plan to find $6 million in permanent cost savings each on the general government and school sides (a $12 million total target) and said the budget fully funds the school division’s adopted budget and includes additional funds for salary increases and programs such as the second year of the Henrico Cares program and expanded security and English-language positions.

Public comment was received during the hearing (the board also took other public comments at the 5 p.m. hearing). After the staff presentation the board opened the item for public comment and then returned to the dais. With no additional board questions, the board voted to defer final action on agenda item 88-25, the operating and capital annual plans and allocation of car tax relief for tax year 2025, to the board’s April 8 meeting to allow further consideration and public input.

Motion and outcome: A motion to defer final action on the FY26 operating and capital budget (agenda item 88-25) to the Tuesday, April 8 meeting was made by Mr. Nelson and seconded by Ms. Rountree; the motion carried (aye; no opposition noted).