Charlottesville’s FY26 budget on track for surplus

A local government’s spending is dependent on how much money is received through a variety of different revenue sources. Charlottesville has been able to find money for items such as the $6.2 million purchase of an office building for a homeless shelter because of a string of budget surpluses at the end of each fiscal year.

There’s just over a month left until the end of FY2026, but three quarters are already in the books. Budget staff track revenues and expenditures as they happen and periodically give Council an updated projection.

“Overall we are looking at a revenue budget surplus of about $5.5 million, or just over 2 percent of the total budget,” said Krisy Hammill, the city’s director of budgets and grant management.

Almost all tax revenues are coming in higher than expected with the meals tax projected to bring in $1 million above expected for a total of $19.2 million. That also increased the amount that will go to a dedicated fund to pay off the city’s debt service. Debt service is used to pay for some items in the capital improvement program.

The city expected to make about $1.1 million more in interest income than expected for a total of $3.8 million. However, the plastic bag tax is projected to bring in only $61,000 compared to the $75,000 that was expected.

Real property taxes are due on June 5 and include the extra $0.01 on the tax rate Council agreed to in the FY27 budget. The tax rate applies to the calendar year, not the fiscal year. That partially explains why the city is projected to bring in $117,264,232 as opposed to $116,989,377.

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