Danny Avula’s first proposed budget as Richmond mayor, unveiled on Thursday afternoon, projects a 6% increase in
real estate tax assessments and suggests
utility rate hikes for fiscal year 2026. But despite anticipated revenue growth, the $3 billion financial plan recommends “strategic budget reductions” worth almost $11 million amid a backdrop of
financial uncertainty both at home and abroad . City officials are bracing for
next year’s real estate assessment freeze — designed to align the assessment and budget calendars going forward — that will see real estate tax revenues stall during fiscal year 2027. And they’re still working to determine
the potential impacts of President Donald Trump’s efforts to rescind federal loans and grants .
Richmond Mayor Danny Avula walks into chambers at City Hall to present the fiscal year 2026 budget to City Council on Thursday. “We’ve had to address some challenges that are facing cities across the country, and some challenges that are unique to Richmond,” the mayor said during a Thursday afternoon address to City Council. Those unique challenges include the significant presence of tax-exempt real estate owned by the state government and Virginia Commonwealth University, as well as “years of insufficient and deferred investment in infrastructure,” Avula said. The nine councilmembers will now review the proposed budget and work with Avula to ensure it reflects the needs of their constituents. Public hearings on funding decisions will be held in April, with a financial plan slated to be finalized in May.
Police officers, nonprofit funding slashed
Among the cost-saving measures Avula proposed was a reduction in funding for police officer positions. The city’s previous budget funded up to 725 sworn officers in the Richmond Police Department. Avula’s fiscal year 2026 budget proposal saw that number cut to 590 officers — a figure Avula said is still 60 officers more than RPD’s current staffing level. That would match the capacity of Richmond police's training academies this year.
Since the 2020 murder of George Floyd by Minneapolis police officer Derek Chauvin, police departments across the country have struggled to hit hiring and staffing targets. Avula’s administration also wants to trim funding for local nonprofits. The non-departmental grant program, which supports nonprofits, was the subject of a recent report from the city auditor, who found officials had directed funds to ineligible nonprofits. If approved, the 2026 budget would see the available funds pared back from $13 million to $9 million. “This decision reflects a need to maintain a balanced budget while focusing limited resources on the city’s highest priorities,” Avula said.
RPS funding up, but short of request
Avula’s budget would see the city direct nearly $249 million into Richmond Public Schools’ general fund. That would be a record investment, and a 64% increase from school funding less than a decade ago. But it would still fall $20 million short of the figure RPS officials said they need from the city to keep up with the division’s financial obligations and repair aging facilities. And RPS’ total funding — which includes the city’s contributions, capital improvement dollars and state funding — would drop from $531,425,760 to $524,376,412 year over year. In his speech to City Council, Avula placed some of the burden on state officials, pointing out that “Virginia school divisions receive 14% less funding per student than the 50-state average.” In a statement, RPS Superintendent Jason Kamras said that, while school officials “understand the city is facing a tough budget year,” the administration is shortchanging students by not meeting RPS’ funding requests. “It jeopardizes the progress we’ve made, and our children’s future,” Kamras said.
Kenya Gibson — who represents the 3rd District on City Council, and formerly a member of the School Board — told The Times-Dispatch that she would need some time to read the proposal before providing a detailed comment. “I got involved in this because I have an interest in funding schools,” she said. “Now that I’m on City Council, I feel just as passionate about that, but also, we have to talk about (other) issues” like affordable housing. “It’s going to have to be a balance,” Gibson said. “It’s true that Richmond’s ability to generate new revenue is constrained, and the state isn’t pitching in its fair share.”
Real estate assessments, utility rates to rise
Avula’s proposed budget forecasts a 6% increase in real estate assessments, worth a total of roughly $42 million — about on par with the 6.6% rise last year. Officials have said the modest increase — compared with the double-digit spikes in 2022 and 2023 — is partially a result of financial unease. The Richmond area is home to tens of thousands federal employees. If many of those employees are ordered to come back to work in person in D.C. or are laid off, the result could be a saturated real estate market that puts downward pressure on housing prices.
Richmond Mayor Danny Avula presents the fiscal year 2026 budget to City Council on Thursday at City Hall. The budget projects a 6% increase in real estate tax assessments. Real estate tax revenue makes up about 60% of the city’s revenues — the “single largest source,” Avula said. But unfortunately for the city’s coffers, a significant portion of Richmond’s 62 square miles is occupied by the state government and VCU — neither of which pay real estate taxes. Much of that tax-exempt land is among the “most valuable property in the city,” Avula said. As a result, the city misses out on $63 million annually. That’s historically been part of the justification for Richmond’s real estate tax rate: $1.20 per $100 of assessed value, drastically higher than surrounding localities. But it’s a rationale that’s beginning to wear thin for 8th District Councilwoman Reva Trammell, who said eliminating wasteful spending should be a primary goal. “I think it’s horrible,” Trammell said. “I don’t think it’s right to keep taxing people over and over, especially the homeowners, the seniors, the business owners.” Trammell last year lost her bid to lower the real estate tax rate by 4 cents. But she said after Avula’s presentation that she will take up the issue again in the coming weeks.
Trammell also was incensed by the administration’s request to raise utility rates — again. Under Avula’s proposed budget, base rates across the gas, stormwater, water and wastewater utilities would increase by an average total of $12.83 per month. Avula said that hike, which he described as nominal, will support a $200 million effort to replace leaky gas pipes, a $162 million investment in the city’s water distribution system (including lead pipe replacement), and a $490 million investment in the city’s wastewater plant and sewer pipes. Those projects will happen over the next five years. “The proposed rates reflect a balance between investing in our infrastructure for safe and reliable services, and ensuring rates remain as low as practical,” Avula said. Officials have said the rate increases are not tied to the Jan. 6 failure of the city’s water treatment plant, which occurred well after the budgeting process began.
Reva Trammell, the 8th District councilwoman, said Thursday that eliminating wasteful spending should be a primary goal for City Council. Odds and ends
The budget reflects some of the commitments Avula made during his campaign, such as addressing the affordable housing crisis and enhancing City Hall’s services. The mayor proposed a combined $49 million for affordable housing, spread across social programs for people who are homeless or at risk of homelessness and the construction of additional housing. Through grant funding, the city refunds developers’ real estate taxes for up to 30 years if the developers agree to maintain a fixed number of affordable units. Avula also pitched raising city employee salaries by 3.25% at a cost of around $19 million, and creating a new director-level position within the city’s Department of Public Works to oversee transportation. The councilmembers were not permitted to ask questions of the mayor following his presentation. City Council President Cynthia Newbille cut off Trammell as Trammell attempted to address Avula, saying that the members needed time to review the budget before discussing it at length. Trammell called that “disrespectful.” “There’s never a discussion,” she fumed. Trammell did manage to thank Avula for his hard work before Newbille ended the meeting. New VCU coach Phil Martelli Jr. shows off a notebook he received for attending a basketball clinic at the 2011 Final Four at Houston, where the Rams made their first and only appearance in the NCAA tournament national semifinals. The new VCU men's basketball coach Phil Martelli Jr. speaks at an introductory press conference on March 27, 2025, at the Siegel Center in Richmond, Va. The new VCU men's basketball coach Phil Martelli Jr. speaks at an introductory press conference on March 27, 2025, at the Siegel Center in Richmond, Va. The new VCU men's basketball coach Phil Martelli Jr. speaks at an introductory press conference on March 27, 2025, at the Siegel Center in Richmond, Va. VCU President Michael Rao, new VCU men's basketball coach Phil Martelli Jr. and director of athletics Ed McLaughlin are seen with a VCU jersey at the Siegel Center on Thursday. Martelli led Bryant to the NCAA tournament earlier this month. The new VCU men's basketball coach Phil Martelli Jr. speaks at an introductory press conference on March 27, 2025, at the Siegel Center in Richmond, Va. New VCU men's basketball coach Phil Martelli Jr.’s family listens to his introductory press conference on March 27, 2025, at the Siegel Center in Richmond, Va. New VCU men's basketball coach Phil Martelli Jr. embraces his wife after his introductory press conference Thursday at the Siegel Center. VCU President Michael Rao speaks at an introductory press conference for new VCU men's basketball coach Phil Martelli Jr. on March 27, 2025, at the Siegel Center in Richmond, Va. New VCU men's basketball coach Phil Martelli Jr. is seen through a video camera during an introductory press conference on March 27, 2025, at the Siegel Center in Richmond, Va. VCU guard Michael Belle (8) listens to an introductory press conference for new VCU men's basketball coach Phil Martelli Jr. on March 27, 2025, at the Siegel Center in Richmond, Va. Members of the VCU basketball team listen to an introductory press conference for new VCU men's basketball coach Phil Martelli Jr. on March 27, 2025, at the Siegel Center in Richmond, Va.
PHOTOS: VCU introduces Phil Martelli Jr. as men's basketball head coach
New VCU coach Phil Martelli Jr. shows off a notebook he received for attending a basketball clinic at the 2011 Final Four at Houston, where the Rams made their first and only appearance in the NCAA tournament national semifinals. The new VCU men's basketball coach Phil Martelli Jr. speaks at an introductory press conference on March 27, 2025, at the Siegel Center in Richmond, Va. The new VCU men's basketball coach Phil Martelli Jr. speaks at an introductory press conference on March 27, 2025, at the Siegel Center in Richmond, Va. The new VCU men's basketball coach Phil Martelli Jr. speaks at an introductory press conference on March 27, 2025, at the Siegel Center in Richmond, Va. VCU President Michael Rao, new VCU men's basketball coach Phil Martelli Jr. and director of athletics Ed McLaughlin are seen with a VCU jersey at the Siegel Center on Thursday. Martelli led Bryant to the NCAA tournament earlier this month. The new VCU men's basketball coach Phil Martelli Jr. speaks at an introductory press conference on March 27, 2025, at the Siegel Center in Richmond, Va. New VCU men's basketball coach Phil Martelli Jr.’s family listens to his introductory press conference on March 27, 2025, at the Siegel Center in Richmond, Va. New VCU men's basketball coach Phil Martelli Jr. embraces his wife after his introductory press conference Thursday at the Siegel Center. VCU President Michael Rao speaks at an introductory press conference for new VCU men's basketball coach Phil Martelli Jr. on March 27, 2025, at the Siegel Center in Richmond, Va. New VCU men's basketball coach Phil Martelli Jr. is seen through a video camera during an introductory press conference on March 27, 2025, at the Siegel Center in Richmond, Va. VCU guard Michael Belle (8) listens to an introductory press conference for new VCU men's basketball coach Phil Martelli Jr. on March 27, 2025, at the Siegel Center in Richmond, Va. Members of the VCU basketball team listen to an introductory press conference for new VCU men's basketball coach Phil Martelli Jr. on March 27, 2025, at the Siegel Center in Richmond, Va.
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