Roanoke County administrator says budget path ‘unsustainable,’ recommends holding tax rate

Roanoke County Administrator Richard Kwood presented the proposed fiscal year 2026–27 operating budget to the Roanoke County Board of Supervisors on March 24, 2026, recommending that the board hold the real estate tax rate steady rather than pursue an additional reduction this year.

Kwood told the board the recommended total budget is about $285 million and said staff could not responsibly propose a tax‑rate cut “given the current climate,” citing uncertainties in fuel prices, slowing sales tax, and other revenue pressures. He said the administration is recommending a $3 million reduction to the formula transfer to schools this year to make room for employee raises while noting that the county’s tax‑rate reductions since 2023 continue to leave taxpayers with roughly $16.3 million in lower payments compared with 2022 levels.

Why it matters: Kwood framed the budget as a turning point for the county, noting a long‑term mismatch between a growing county population and falling school enrollment. He said school average daily membership peaked at 14,820 in 2008 and the school division projects an ADM of 12,905 for FY27, leaving roughly 3,800 excess seats. That divergence, Kwood said, and rising costs for the Children’s Services Act (CSA), software licenses, and fleet replacement create structural pressure on future budgets.

Key details from the presentation

- Total recommended budget: $285 million (presentation slide cited). - Proposed treatment of taxes: hold the current real estate tax rate; staff did not recommend a reduction this year. - Schools: recommended transfer shown as about $96.94 million; staff proposed a $3 million adjustment to allow county employee raises while noting the school system will receive an estimated $2.6 million additional state support due to a changed local composite index (LCI). - New revenue cited: roughly $11.9–12.0 million in net new revenue, plus about $1 million in earmarked intergovernmental funds in the proposed year. - Capital: proposed FY27–36 CIP totals about $131.6 million over 10 years; staff recommended withdrawing $1.5 million in cash from the capital debt model to acquire a fire truck and an ambulance this budget cycle and identified many unfunded capital needs totaling tens of millions of dollars. - Fleet: Kwood said long‑term fleet investment should be roughly $5 million annually but the current base budget invests under $1 million, creating future operational risk (broken or unavailable vehicles for services such as solid waste or emergency response). - Positions: the recommended budget includes 11 new positions; most are temporary or largely reimbursed (social services positions are highly reimbursable and shared with the City of Salem). - Fund balance: the county’s policy maintains a 12% unappropriated fund balance (cited in presentation as about $32 million); rating agencies prefer higher reserves.

Quotes and exchanges

- “I’m unable unfortunately to recommend a tax rate reduction this year given the current climate,” Richard Kwood, County Administrator, said during the presentation.

- On long‑term risk: Kwood warned the board that “the path we’re on is not sustainable” and urged the board to begin work with schools this budget cycle on shared capital and CSA arrangements to avoid abrupt tradeoffs in future years.

- On state budget timing and school aid: Mr. North (board member) said he expected the Senate conferees’ approach to prevail and predicted that the schools may receive additional state funding when the General Assembly conferees finalize the budget.

Board reaction and next steps

Supervisors broadly agreed the county must pursue collaborative options with the school system, reconsider the shared capital model and CSA funding, and improve intra‑year financial monitoring. Several supervisors recommended earlier forecast reviews (for example, a January run‑rate check) so the board can respond more quickly to emerging deficits or surpluses.

Kwood closed the presentation by suggesting staff return with analyses on shared capital contributions and the CSA treatment in the current revenue‑sharing formula; he emphasized that changes can be phased and do not have to occur immediately.

Formal actions recorded during the meeting

- Resolution recognizing PIO staffer M. Portner: the clerk read a resolution citing the employee’s role in a social media strategic plan adopted March 2025 and production metrics (more than 23 million impressions, more than 1.2 million engagements, net audience growth exceeding 29,000). The board voted unanimously to adopt the resolution.

Public process and timeline

Kwood noted the board’s calendar for the budget: an earlier April meeting for tax bill processing, a public hearing on the proposed budget scheduled for April 28, and a tentative adoption scheduled for May 26; he said the schedule remains subject to change pending the state budget outcome.

What the presentation did not decide

The board received the recommended budget and discussed options. No change to the tax rate was adopted at the March 24 meeting; final decisions were left to future meetings after public hearing(s) and further staff work with the school division.

Reporting note: Quotes and figures are drawn from the administrator’s presentation and the board discussion on March 24, 2026.