Charlottesville staff outline tighter FY26 budget, warn of federal funding uncertainty

Charlottesville city staff told the City Council at a Jan. 30 budget work session that projected FY26 revenue gains are smaller than recent years and that several large cost items are already built into the proposed spending plan.

The update, delivered by Mr. Sanders and Miss Hamill during the council's budget work session, projected new general‑fund revenues for FY26 of just over $10 million, while noting that $3.4 million of increases tied to real‑estate and personal‑property taxes would be allocated to the Charlottesville City Schools under the city's 40% formula. Sanders said the remaining roughly $7 million would be available to the city for FY26 budget planning.

Why it matters: After several years of unusually strong revenues, staff said the city is returning to more modest growth. Councilors were warned that lower sales, meals and lodging tax receipts and uncertainty about federal funding streams could reduce the city's flexibility and increase the need to prioritize ongoing obligations.

City staff presented the revenue and policy context first. Hamill said the revenue team is still finalizing some numbers and that January reassessment figures already factored into the…