The Henry County Board of Supervisors will consider several options, including a possible tax increase, as it decides how to fund a school budget gap brought on by an increase in state funding.
Localities in Virginia are required to match a portion of the state’s contribution to school divisions. For the upcoming fiscal year, the state is increasing its school allocation, which translates to a higher local match.
Henry County Schools will receive an additional $7.5 million from the state.
“On May 13, the governor finally signed the state budget … and fortunately, it did include a lot of new money for school systems; the commonwealth did step up and do their obligation to schools as the constitution required,” Dale Wagoner, the county administrator, said at the May 21 supervisors meeting.
But, he said, the increase will result in a larger state-mandated match.
According to staff, the local allocation, accounting for the state increase, would be $24 million. The current fiscal year’s local allocation was $16 million.
“I’ve been here 21 years and I’ve never seen an increase that large,” Darrell Jones, the county’s chief financial officer, said following the May meeting.
The school division’s total budget is now $116.8 million. Prior to the state’s decision, the school system’s budget had been just over $107 million.
“The school system did their budget based on the governor’s original budget, which did not have all this extra money in it,” Jones said.
These numbers could change as the county continues to hash out the school system’s budget. Jones said he has little doubt that when the process is over with, the school system will have more money than it anticipated at the beginning of the budgeting process. He also speculates that if this year’s state increase becomes the new normal, a tax increase might be inevitable in the coming years, regardless of what supervisors decide at an upcoming special meeting.
“I don’t see them going backwards,” Jones said.
Currently, Henry County’s real estate tax is 55.5 cents per $100 valuation. Based on estimates, Wagoner said at the May meeting, a new real estate tax of 61 cents would balance the budget.
“It gives you something to think about,” Wagoner said.
Supervisor Garrett Dillard said at the May meeting that regardless of what the council ultimately chooses, it must be in the school system’s best interest.
“The state has really rewarded the school system, and we have to look at, if the state is going to do that, we as a board have to make some tough decisions to make sure the school system gets all of the funds that they need so they can maximize the funds that they do receive.”
Tuesday’s special meeting will be held at 5 p.m. at the administration building’s fourth floor conference room. Everything from delving into emergency funds to changing the tax rate were offered as possible solutions.
