Charlottesville officials project revenue shortfall for future budgets

In recent years, Charlottesville’s real property assessments have increased dramatically, creating new streams of revenue for Council to spend on its priorities.

Charlottesville has experienced four consecutive years of growth in general fund revenue going from $185 million in FY2021 to a projected $253 million for FY2025. Half of that comes from the real property tax.

The FY2026 budget is balanced at $265,248,446 though it is too early to determine if there will be another surplus.

A projection created for today’s work session on the fiscal year 2027 budget shows the city may not be able to keep up with a growing number of expenditures.

The current estimate is that the city will need to spend nearly $276 million in FY2027 but will only bring in $269.3 million in revenue. That is a $6.6 million gap. This estimate is based on an assumption that real property assessments will increase by 3.5 percent.

The budget projections go out to FY2030 when total revenues are expected to climb to $301,1789,830, mostly based on an assumption the property tax will continue to increase. That year shows a projected deficit of $9,268,564.

Departments in Charlottesville’s city government have until October 17 to submit proposals for new spending in the budget that will begin on July 1, 2026. That’s one of the many steps in preparing a document for how the city will spend money and where the revenue will come from.

City Council will have joint work sessions with the School Board on December 18 and February 9, 2026. The Planning Commission will have a work session on the capital improvement program on November 25 followed by a public hearing on December 9.

Council will have to determine what real property tax rate to advertise by January 30. The budget will be presented to Council on March 2 with approval slated for April 9.

At their retreat in mid-August, Council got a briefing on some of the economic headwinds facing the nation and the city. Here’s that story if you want to take a look.

Before you go: The time to write and conduct research for this article is covered by paid subscribers to Charlottesville Community Engagement. In fact, this particular installment comes from the October 6, 2025 edition of the program. To ensure this research can be sustained, please consider becoming a paid subscriber or contributing monthly through Patreon.