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Highlights of FY25-26 plan include real estate, personal property tax-rate cuts, continued investment in schools, safety and $50 million for water resiliency

Update: The Board of Supervisors on April 8 voted unanimously to approve the county’s proposed budget for fiscal year 2025-26.

Henrico’s proposed budget for fiscal year 2025-26 would reduce the tax rates on real estate and personal property, delivering to residents and businesses the county’s most comprehensive, permanent tax relief since 1987.

In addition, the budget would continue to strengthen Henrico’s investments in education and public safety; advance capital projects, including those identified with the voter-approved 2022 bond referendum; and provide an initial allocation of $50 million to make the county’s utilities system stronger and more resilient. The funding is designed to offer flexibility as officials consider options – both independently and regionally – to address challenges with water distribution that arose in early January when a shutdown of the city of Richmond’s water treatment plant caused widespread service outages in eastern Henrico.

“As a county, we’re committed to doing everything we can, as fast as we can, to provide a public water system that meets our community’s needs in the 21st century,” said Board of Supervisors Chair Dan J. Schmitt, of the Brookland District. “By including these funds in our budget and continuing to work with our Public Utilities staff and external consultants, we’ll be ready to take whatever steps are needed to ensure that the service disruptions of early last month never happen again.”

County Manager John A. Vithoulkas and other officials outlined broad themes of the budget at a briefing today – ahead of the plan’s formal presentation to the Board of Supervisors on Tuesday, March 11. Overall, the general fund budget totals $1.35 billion, an increase of 8% over the current year’s plan. Of those additional funds, 82% would support either education or public safety. Among other highlights, the plan would fully fund the request of Henrico County Public Schools and provide a 6% raise for employees of the county’s government and HCPS. It also would include targeted market adjustments for custodians, maintenance staff and instructional assistants.

“The budget we’re proposing for the upcoming year will continue to make Henrico County an outstanding place to live, work, operate a business and visit,” Vithoulkas said. “It will allow us to build on our strengths, particularly in education and public safety, and confront our challenges from pedestrian safety to water while also providing the most comprehensive and permanent tax relief to our residents and businesses since 1987. The proposed tax-rate cuts are accelerated from what we initially thought we might be able to offer and are targeted to benefit our entire community – approximately 115,000 homeowners, 320,000 vehicle owners and 20,000 businesses. We’re able to take these bold steps because of our vibrant economy, high-performing workforce and unwavering commitment to outstanding fiscal stewardship.”

As proposed, the real estate tax rate would be reduced by 2 cents, to 83 cents per $100 of assessed value. The current rate of 85 cents is already the lowest among Virginia’s large localities. Likewise, Henrico’s personal property tax rate would drop to $3.35 for both vehicles and business personal property. Those rates are currently $3.40 and $3.50, respectively.

Overall, the proposed budget would extend an estimated $18.3 million in new tax relief, which includes additional relief for older and/or disabled residents through the Real Estate Advantage Program and Real Estate Cap program. To partially offset those funds, the budget estimates an additional $13.6 million in revenue from a rate increase for a category of personal property tax that applies to data center computers and related equipment. Henrico created the special taxing category at 40 cents in fiscal 2017-18, which helped establish the county as a hub for data centers. Officials expect the industry to continue to flourish given the proximity of the Richmond Network Access Point and because the proposed tax rate of $2.60 would be lower than the state average of $3.09 and at least $1.00 less than the comparable rates of localities in northern Virginia. The adjusted rate for data center equipment would not impact Henrico’s affordable housing initiative because it’s funded through the real estate taxes associated with data centers.

The Board of Supervisors will hold a work session at 3:45 p.m. today to receive an overview of the proposed budget. The board will have four weeks to review the document following its presentation March 11. The board will hold legislative sessions March 17-21 to review each department’s budget in detail. A public hearing will be held at 5 p.m. Tuesday, March 25 in the Board Room at the Henrico County Government Center, 4301 E. Parham Road. Budget adoption is proposed for Tuesday, April 8. Once approved, the document will take effect for the year beginning July 1.

Stay up to date with Henrico news, events, and announcements.

Henrico aims to boost access to homeownership with $60 million fund

Henrico County has set the framework for its Affordable Housing Trust Fund program as an initial set of residential developments are under review for participation.

After announcing its plans in May, the Board of Supervisors established the trust fund, effective July 1, with $60 million in previously unbudgeted revenues from data centers.

The fund aims to help working adults – such as health and child care workers, paralegals, teachers and others – become homeowners by bridging the gap between what they can afford and prevailing home prices, which have soared in recent years due to strong demand and elevated interest rates.

Officials hope to eventually have as many as 100 to 150 new homes per year sold through the program as awareness grows.

“We’re excited about the trust fund launching, and it seems like prospective homebuyers and the builder/developer community are equally excited about the program as we are,” Department of Community Revitalization Director Eric Leabough said.

The nonprofit Partnership for Housing Affordability, which is administering the program, began accepting project applications in September. Two are currently under review, with another submission expected.

Officials with the county and nonprofit spent recent months fleshing out many of the program’s details, including the qualifying criteria for homebuyers and new residential developments.

In most cases, the trust fund is expected to reimburse builders and developers for eligible costs for land and other expenses associated with the construction of the new units – single-family homes, townhouses and condominiums – that are approved for the program, Leabough said.

“We’re helping them reduce the sales price to the buyer,” he said.

The program is equipped to further limit a homebuyer’s costs through a waiver of county fees for utility hookups and permits. Qualifying developments also will receive an expedited review of plans.

The trust fund strengthens Henrico’s earlier efforts to boost opportunities for affordable homeownership, and it’s designed to be implemented countywide, with participating dwellings dispersed in new communities alongside and indistinguishable from market-rate homes. One of the requirements is that the dwellings must be “architecturally compatible” with surrounding homes.

To ensure the program meets its goals for affordability, all qualifying dwellings must be owner-occupied, and each lot will carry deed restrictions for at least 10 years, even if it’s resold. During that period, any new buyer would have to meet the same qualifications as the original purchaser.

“Every home will have at least a 10-year affordability period,” Leabough said.

To have a development qualify for funding, a builder or developer must enter into an agreement with the Partnership for Housing Affordability that establishes a maximum sales price for the participating dwellings and the income limits of eligible buyers.

The program is designed for individuals with household incomes between 60% and 120% of the area median income, as defined by the U.S. Department of Housing and Urban Development. For example, that means incomes of $52,960 to $105,960 for a two-person household and $66,180 to $132,360 for a four-person household.

The affordable housing program also will consider price variations in the local housing market by setting a home’s maximum sales price by ZIP code in line with sales data.

For example, a three-bedroom home in Glen Allen normally listing for $589,375 could carry a maximum price of $370,100 for a buyer qualifying at 120% of the area median income. Comparably, a three-bedroom home in Highland Springs normally listed at $255,750 could sell for $229,100 to a buyer qualifying at 80% of the area median income.

For more information on the Affordable Housing Trust Fund or to apply as a builder or developer, visit pharva.com/henrico-trust-fund/. The Partnership for Housing Affordability is developing a portal that will connect prospective homebuyers with qualifying developers and builders.