Winchester council advertises 81.5¢ tax cap as schools seek $1.9 million

Winchester City Council set a not-to-exceed real property tax rate of 81.5 cents on the dollar and moved into continued budget negotiations after Winchester Public Schools presented a FY2027 request that would require an additional $1.9 million from the city.

Superintendent Jason Van Vuckelen and school staff told the council the school division faces a $4.3 million increase in needs for FY2027, but expects $1.16 million in additional state and Medicaid revenue plus roughly $1.2 million in internal savings, leaving a $1.9 million gap in the operating request. The presentation emphasized an enrollment decline of about 100 average daily membership (ADM) students this year and said that teacher pay and health insurance competitiveness are driving recruitment and retention challenges.

"We have a total increase in our budget of $4,300,000," the school presentation said, and the superintendent described a three‑year plan to reduce employee premium burdens to help retain staff. The schools also requested one-time capital funding — including about $1.3 million to replace seats in the Patsy Cline Theater — and identified tiered priorities the division would be forced to trim if the city cannot close the gap.

Public testimony strongly backed the schools. Michael Serguse, president of the Winchester Education Association, urged the council to "support the full Winchester Public Schools budget," saying the package addresses staff retention and would help keep teachers in the city. Stewart Island, an at-large member of the school board, called the funding request "moderate, reasonable, transparent, and essential."

Council members spent more than an hour probing the drivers behind enrollment and costs, including state funding timing, the effect of reduced ADM on state revenue, and regional pay and benefits competition. Several members raised the possibility of setting a formulaic baseline for school funding to reduce year-to-year contention; others warned that a formula would bring trade-offs. Councilors noted the recent ARPA and federal aid inflows that altered past comparisons and repeatedly emphasized that certain "have to" items — such as required state formulas and some health-insurance costs — limit what can be cut.

The city manager, John Piper, outlined two primary paths for covering city and school needs: a revenue-neutral option (advertising the current rate at 79.5 cents) that levers projected health-care savings (he reported an updated projected employee health-care increase of about 19.5% but noted some negotiated savings) or a revenue-increase option that would include a half-cent (0.5¢) meals tax change estimated to generate about $1 million. Piper recommended using part of the projected $250,000 health‑insurance savings to increase city employee COLAs to 3.5% and earmarking roughly $70,000 toward the school request if the council stayed revenue neutral.

The meals tax drew heated debate. Small business owners and downtown restaurateurs warned that small margins and outside customers make the meals tax disproportionately harmful. "This kind of tax increases the effects on both the consumer and the small business owner," said Katie Sartell, a small business owner who asked councilors to reconsider raising the meals tax or to include mitigation for local businesses. Several councilors said they would not support increasing the meals tax; others favored a meals-tax approach because nonresidents provide a large share of downtown dining revenue.

After discussion the council voted to advertise a not-to-exceed real estate tax rate of 81.5 cents. On a roll call the motion passed; one recorded dissent was noted during the vote. Council staff said advertising the not-to-exceed rate preserves options (advertised rates can be lowered but not increased) and gives staff and council time to refine revenue and expenditure choices ahead of adoption deadlines.

Votes at a glance

- CUP-26-1 (96 Moulton Drive) — Conditional Use Permit to allow a 6-foot fence on a corner side yard: approved (motion, second; conditions: permit before installation; completion within one year; maximum height 6 ft). - O2026-9 (Enterprise zone / EDA grant amendment for Fayette Properties) — second reading approved (adds qualified residential units to the EDA business development grant program; returns to council for project-level approvals). - O2026-10 (Building permit fee schedule update) — second reading approved (adds electrical permitting fees, standardizes fees consistent with ICC and an annual index). - O2026-3 / O2026-4 (Zoning and subdivision ordinance amendments re: platted parcels on private streets) — second readings approved. - O2026-11 (Advertise real property tax rate; not to exceed 81.5¢) — motion passed on roll call (one recorded dissent).

What comes next

Staff will run additional scenario modeling and consult with Winchester Public Schools to show how partial funding options (for example the manager’s revenue-neutral distribution of insurance savings and a smaller COLA) would affect the school division’s tiered priorities. The council must finalize an advertised/actual tax rate and adopt the budget in subsequent readings and meetings. The manager and finance staff said they will return with updated revenue projections and refined options, including the projected health-insurance savings and any additional cost-savings identified prior to adoption.