Rappahannock County budget architects trying to avoid tax hikes

Rappahannock County’s proposed increase in property taxes is in play, but may evaporate if two other sources of funds materialize. 

Hit by a shortfall of state support for the county’s schools, County Administrator Garrey W. Curry last month proposed increasing real estate taxes to 57 cents per $100 of assessed value, up from the current 55 cents. The change would increase county revenues by $383,367, the largest single contribution in the drive to make up for the budget gap that resulted from the state decision to cut funds the schools had expected. 

By law, the county budget – proposed at $30.1 million for the fiscal year beginning in July – must balance.  

Facing resistance from property owners, the Board of Supervisors then called for walking back the increase to 56 cents per $100 of assessed value. But this compromise, carried in the budget version advertised in advance of a public hearing April 15, may itself be walked back, if:

• The updated forecasts of tax revenues show a more robust intake than initially predicted;

• A $200,000 state injection for school capital expenditures can be partly diverted for school operations. 

Two supervisors – Christine Smith (Piedmont District) and Keir Whitson (Hampton District) – voted against the tax increase — even in its reduced version. Both pushed back on a two-year pattern where the county felt obliged to step up after the state stepped back, opting not to follow through with education support the schools had counted on. 

“Here we are two years in a row,” Whitson fumed. “We’re in a standoff. We’re not going to bend because the state is being unreasonable.”  

Nonetheless, a majority of the supervisors voted to advertise the tax hike to 56 cents per $100 of assessed value. Following the April 15 public hearing, the supervisors will work to adopt a final budget. The school budget must be in place by May 15. 

State budget in turmoil

At the same time, the state budget is in turmoil. Gov. Glenn Youngkin has returned to the General Assembly more than 200 amendments to consider. And in another layer of uncertainty a conference committee formed to reconcile differences between budget bills from the Senate and House of Delegates calls for more support for local school systems in Virginia. Today the situation is beyond unpredictable, but it may yet turn out that Rappahannock schools find that a portion of the elusive financial support they had expected has been restored.  

Whitson is hoping that before a final budget is locked in, the two other revenue streams will fill the shortfall and balance the budget. The state provides $200,000 for capital investment projects at the schools, but doesn’t insist that all of the allocation be disbursed on structural upgrades. 

The schools carry a list of desired structural improvements, including significant roof repairs, door replacements, and work on bathroom and kitchen facilities. But not all have the same urgency, and some funds could be channeled to school operations. The supervisors are expecting details on what portion of the capital funds could be shifted. 

Meanwhile the county office of the Commissioner of Revenue is fine-tuning its forecasts on property tax receipts. An upward revision might obviate the need for any increase in real estate taxes. 

Last year, the county proposed, but later jettisoned tax increases, after uncovering alternate revenue streams. Increases in property taxes and meals and lodging taxes – both unpopular – were eventually shelved after the county discovered that higher-than-expected revenues from property taxes and interest earnings made the higher levies unnecessary.    

The budgetary wrestling underscores the pressures facing the schools, and their broadly respected Superintendent, Dr. Shannon Grimsley. The schools represent the county’s single largest expenditure, and while many residents want to meet the School Board’s funding requests, some taxpayers have objected to rising education outlays when the school population has been shrinking. 

Many of the schools’ costs – including salary increases in the budget now under debate –  are mandated, though not funded, by the state. And while he regularly resists tax increases, Whitson insists, “I’m not saying the schools are not doing their best.” Still he has said that he would prefer that school funding from the county remain where it was two years ago – at $8.9 million, lower than both the county administrator’s proposal and the schools’ request. 

Data show that compared with other Virginia school systems serving student populations under 1,000, the Rappahannock schools’ disbursements of $20,049 per student, are slightly lower than the average of $20,782. However, Rappahannock’s administrative costs, running at $857,856, are higher than the average of $803,433. 

One significant early trend: The “average daily membership” – the number of students in school on a given day – rose to 739 in the last school year, up from 725 a year earlier. That’s the first population increase since the 2015-2016 academic year, when students numbered 869. A larger student population is often linked with stronger local support, and if the trend continues, it can translate into more robust support from the state.

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