Charlottesville experienced lower revenue collections in first quarter of FY2025

The numbers are in for Charlottesville’s first quarter of the fiscal year that began on July 1 and a report submitted for City Council’s November 4, 2024 meeting indicates that the era of continued revenue growth has come to an end. 

“For the first time in a long time we are seeing a little bit of a different trend,” said Krisy Hammill, director of budget and performance measurement. “We are finding that the revenues are more closely aligning to our budget. There are a few revenues that have not performed as strongly in the past.” 

There were more details in the written report.

“Current revised projections indicate that revenues are tracking slightly below budget, by $1,085,537 or -0.51 percent,” writes City Manager Sam Sanders in the financial report for the first quarter. 

The reduction is due to lower-than-expected collections of sales tax and lodging tax. The report cautions against drawing any conclusions about how the entire year may come in, but does note that this is the first time since the late 2000’s that there has been a decline in either source. That does not count the first year of the pandemic in 2020. 

“The take-away from this quarterly report is that we are likely returning to a more ‘normal’ revenue growth pattern,” Sanders continued. “That said, the revenue team is continuing to collect data and [is] monitoring revenues closely.”

Hammill said Charlottesville’s trends appear different from peers.

“We are noting that this is a little bit different from the results that the state is seeing and even Albemarle County,” Hammill said. “They are both reporting slight increases for the same quarter.”

Members of the public can monitor those revenues on a quarterly basis in the Budget Explorer. 

The adopted budget anticipates bringing in a total of $21,252,218 in the sales tax for the entire year, but so far have only collected 22.54 percent of that amount.  The FY25 budget also expects $9,562,500 across the year, and only 22.03 percent of that amount has been collected so far. 

Earlier this year, Council voted to increase the lodging tax rate from 8 percent to 9 percent and the meals tax rate from 6.5 percent to 7 percent. 

Revenues from the real estate tax are expected to be $108,438,706 for the entire fiscal year, but only 0.4 percent of that amount has been received so far. That tax as well as the personal property tax are not due until December 5. Council also increased that tax rate from $0.96 per $100 of assessed value to $0.98 per $100. 

Meanwhile the city’s financial staff continues to collect and process the data for the fourth quarter of FY2024 which ran from April 1 to June 30 of this year. This information will be presented to Council at their meeting on December 16. 

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