Charlottesville releases proposed budget, city staff assessing potential impact of federal funding disruptions

It’s budget season, the time of year when local governments in Virginia decide what to fund — and what not to fund — in the upcoming fiscal year. 

Charlottesville City Manager Sam Sanders, the City’s top administrator, presented a recommended operating and capital improvement budget for the 2026 fiscal year to the City Council on March 4. (View the presentation here.)

The $264.5 million proposed budget includes expenditures for the entire city’s operation  — public schools, public safety, staff salaries, parks and recreation, and more — from July 1, 2025 through June 30, 2026. (View the city’s budget explorer here, and major highlights here.)

It would be a 4.97%, or $12.5 million, increase over the $252 million 2025 fiscal year budget. 

Funding for it will come from a variety of sources, including federal and state grants, revenue from real property and personal property taxes, food and beverage taxes, and transient occupancy taxes (paid by hotels and short-term stays). 

Priorities for expenditures include salaries and benefits for city employees as well as additional investment in schools, transportation, and affordable housing. Read more about the city’s strategic spending priorities here.

In a note included in the proposed budget document (see page 11 of this PDF) Sanders addressed the ongoing uncertainty about the future of federal funds for the city.

“The unpredictable and likely damaging impacts of anticipated actions by the federal government will undoubtedly have some influence on the City’s operations,” Sanders wrote. 

City staff have been assessing those potential effects, and so far, the assessment “produces a high degree of confidence the City government can weather any changes it may face,” he added.

Over the next month, the Council will take Sanders’ recommendations and public comment into consideration before voting to adopt a final budget, likely in mid-April. 

Sanders has not proposed any tax rate increases for this fiscal year. This is different from last year, when the Council voted to increase real estate, meals, personal property, and lodging tax rates in order to balance the budget. 

Even though the City will not be increasing tax rates, it still expects to earn more revenue from those taxes in fiscal year 2026 than in the prior year. That’s in large part because the 2025 assessed value of residential and commercial properties — which directly affects how much the City collects in real estate taxes — has increased 8.18% and 6.14%, respectively. 

Sanders held two community budget forums, one in December 2024 and another in January 2025, but Charlottesville residents can still comment on the budget and the tax rates during upcoming public hearings.

Editors’ note: This story was updated on March 17, 2025, to reflect the rescheduled date for the first public hearing on the proposed tax rate.

Take Action

Charlottesville has released its proposed budget, and residents can comment during upcoming community budget forums:

• First public hearing of the budget and community budget forum: Thurs., March 20, 6 p.m., CitySpace, 100 5th St. NE (entrance off the Downtown Mall)
• Second public hearing of budget and hearing on tax rate (tax rate hearing rescheduled from March 17): Mon., April 7, 6:30 p.m., City Council Chambers, 605 E. Main St.
• Second reading and vote to approve budget and tax rate: Mon, April 14, 6:30 p.m., City Council Chambers, 605 E. Main St.

View the latest budget schedule here and use the City’s budget explorer here.

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