CHARLOTTESVILLE, VA (CVILLE RIGHT NOW) – Using a combination of additional unexpected revenues and some reserve fund money, City Council stands poised to cut the proposed 2-cent real estate tax hike in City Manager Sam Sanders’ 2027 budget in half.

Vice Mayor Natalie Oschrin told WINA Morning News that staff Monday night put finishing touches on a plan Councilors in the April 2 budget wrap-up work session gave individual verbal endorsements of to reduce the real estate tax increase to a penny.

“We advertised two, which would have balanced the budget initially,” Oschrin said. “Our team went back and with an even finer-toothed comb than they did before, they were able find another million dollars to allow us to only raise by one penny instead of two.”

In a March 19 work session, City Budget Director Krisy Hammill outlined new calculations by staff resulting in $1,005,123 more revenue than previously projected.

The bulk of that is from $400,000 more from the BPOL tax, a little more than $377,000 more in sales and use tax revenues, $119,000 from the lodging tax, and $100,000 in interest earned.

Hammill outlined a way to make up the entire $2.4 million-plus that necessitates the entire 2-cent tax hike would be cutting reducing CAT adjustments by $369,000, schools by $569,000, Council strategic initiatives by nearly $110,000, and pulling $415,000 from the citywide reserve fund.

For various reasons, Councilors did not want to take the funds away from those initiatives and did not want to dip that far into the reserves.

However, they agreed to the plan to look at cutting a penny out of the proposed real estate tax increase which meant coming up with more than $1.2-million.

The verbal agreement April 2, with the numbers solidified Monday night, will use the slightly more than $1 million in the newly-projected revenues and add $228,000 from the citywide reserve fund.

Hammill said the citywide reserve is part of the base budget, so the money is already appropriated.

“I don’t think we’re going to be spending everything we have in ’26, and so it’s an easy carryover,” Hammill concluded.

City Council had its final public hearing Monday night based on the 2-cent proposal and the 2027 budget, and will agree to a budget Thursday evening at 6 p.m. in Council chambers.