A look inside Henrico’s $2-billion budget proposal
Henrico County Manager John Vithoulkas introduced a proposed $1.995-billion budget for the upcoming fiscal year to the Henrico Board of Supervisors on March 10, a slight increase of about $65 million from the current fiscal year.
About 83% of the budget increase would go towards Henrico County Public Schools and public safety, with HCPS receiving $27 million more than the current fiscal year. All county and schools employees are set to receive a 3% salary increase this year. All tax rates would remain unchanged. The new fiscal year begins July 1.
Henrico is expecting to see a 3% growth in revenue during the upcoming fiscal year, primarily due to collections from real estate and personal property taxes, but county leaders also expressed concerns about flattening state aid.
Schools ‘got hit this year’ with lack of state aid
State aid to HCPS has plateaued this year, with the school system receiving an increase of only $600,000, despite other counties such as Chesterfield receiving a $34 million increase. Henrico’s gradually-declining school population, along with the county’s recent success in tourism-driven sales tax growth, have placed HCPS in an unfavorable position when it comes to Virginia’s school funding formula, said Vithoulkas.
The formula has placed Henrico as the sixth-lowest county in Virginia when it comes to state education funding increases over 2026-2028 but Chesterfield as the third-highest, he said. Under the governor’s proposed biennial budget, HCPS’ state aid will decrease by about $1.5 million over the next two years.
“This is basically due to a formula that was developed back in 1979. It’s antiquated. Any kind of result that spits this kind of output, you have to question the validity of,” Vithoulkas said. “And we’re going to have to deal with this issue for two years. There is no formal way to appeal or challenge the number.”
As a result, almost 98% of the proposed $27-million increase to HCPS’ budget has come from local dollars. The budget boost will allow HCPS to add more English-learner and special education teachers, address maintenance and HVAC issues with $38 million, and complete two new school buildings with $46 million.
But not all of the Henrico School Board’s requests will be fulfilled in the proposed budget.
HCPS will need to “slow down on a few priorities,” said Henrico Budget Director Justin Crawford, including adding new staff positions. While the school board is asking for 147 new positions, Crawford said the school system will receive about 85 new positions, not including positions added mid-year.
HCPS also will receive $38 million in maintenance funding, including $9 million in meal tax funds, despite the school board requesting $15.3 in meals tax funding and $48.4 million in overall maintenance funding.
“The school board has aggressively asked for a lot more money,” said Varina District supervisors Tyrone Nelson. “I just want to make sure everybody understands that we got hit this year.”
With over $102M in new costs, county implements some cuts
Despite proposing an overall budget increase, county leaders said Henrico will need to remain fiscally conservative and implement immediate cost-saving measures.
The county expects to encounter more than $102 million in new costs this upcoming fiscal year, including salary increases, rising healthcare costs, and new facility and project operations costs. In the proposed budget, Vithoulkas has recommended a 3% reduction overall to county department budgets.
Along with about a $23-million reduction in HCPS’ budget, Vithoulkas also has incorporated $17 million in reductions to other government departments. Many of those budget cuts stem from cost reductions in rates for the Virginia Retirement System.
The county also created a new fiscal wellness committee to brainstorm cost-saving ideas for departments. The committee’s recommendations, including automating more county processes, could save $4 million in costs.
“We’re going to have to be more efficient in order to keep moving forward,” said Crawford.
Vithoulkas has proposed a $344-million capital project budget for this year, including $135 million for the Department of Public Utilities, $84 million for HCPS, $53 million for the Department of Public Works, and $42 million for public safety projects.
Some of the county’s biggest upcoming projects include $50 million for the new Eastern Henrico water transmission line, $27 million for a new public safety training facility, and $27.5 million in additional transportation projects.
Vithoulkas and the board of supervisors will meet with each county department on the proposed budget starting Mar. 16 through Mar. 19. The board is scheduled to vote on a final version of the budget on April 14.
Liana Hardy is the Citizen’s government and education reporter. Support her work and articles like this one by making a contribution to the Citizen.
