Chesterfield’s FY26 budget would cut real estate tax rate, increase BPOL threshold

The Chesterfield County Administration Building. (BizSense file)

Chesterfield’s proposed budget for the upcoming fiscal year would continue recent trends of pushing down the county’s real estate tax rate and bumping up its BPOL threshold.

County officials on Wednesday unveiled their $2.4 billion FY26 budget proposal, including a 1-cent reduction to the real estate rate tax and a $50,000 increase to the threshold at which the county collects BPOL, or Business, Professional and Occupational License taxes.

County Administrator Joe Casey said during the Wednesday presentation that economic uncertainty presented a particular challenge in drafting the spending plan and resulted in a conservative proposal, which is likely to be further tweaked after its anticipated adoption next month.

Casey drew a comparison between the budget proposal and the type of stock-car racing set to return to the Southside Speedway, where county officials and the track’s new operating group formally announced plans to reopen the venue this week.

“In contrast to the entertainment and exciting but uncertain outcome of a race around an oval to a finish line, our budget is an austere approach, where our pace is a straight-line progression, slow and steady with no finish line,” Casey said.

The county’s $1 billion FY26 operating budget is anticipated to grow, compared with the current year’s plan, but at a slower pace. Spending in the county’s general fund is projected to increase 4.4% compared with the current FY25 budget’s operating fund, which increased 5.1% compared with the prior year.

The $44 million in spending growth in the coming year’s general fund would include $15 million in new local funding for the school division. That funding would go for items such as a 3% raise for teachers and operating dollars for the upcoming Deep Creek Middle School, as well as $17 million in increased public safety compensation and $5 million in tax relief measures for disabled residents.

Under the budget proposal, starting salaries for police officers would be $60,145, and teachers would start at $55,047.

The 1-cent decrease in the real estate tax rate would result in a rate of 89 cents per $100 of assessed value. If approved, it would be the fourth consecutive year of rate cuts and comes as a means to help county businesses and residents weather economic uncertainty.

“Even though it’s a challenging economic backdrop, we recognize we’re not in that alone. Households, businesses are facing those same uncertainties,” Deputy County Administrator Matt Harris said.

The county has already decided to allocate a $15 million budget surplus from the current year toward a 5% credit on first-half 2025 real estate tax bills due in June.

The proposed budget would raise the BPOL exemption threshold to $550,000 from the current $500,000 in gross receipts. Businesses with less in gross receipts than the threshold are exempt from the tax. It would be the latest of several BPOL threshold increases by Chesterfield in recent years.

County officials said that a range of cost-controlling measures were implemented in the budget proposal. Chesterfield doesn’t plan to issue any additional debt tied to its 2022 bond referendum, which is powering multiple capital projects, though projects already funded will proceed.

“We came out of the gate and we were very aggressive. The market responded well to us, so we have a good number of those projects from 2022 that the voters approved already underway. So we felt like we could take a step back, take a breath, let those projects work out to completion,” Harris said.

The county said that it has reduced departmental budgets by more than $7 million and that $22 million in budget funding requests will go unfunded, including requests for 175 new positions. The county isn’t tapping into its reserves yet to maintain flexibility in the coming months.

The county government has about 4,200 employees and the school district about 9,000 employees.

County officials said the decision to pull back on spending was influenced by factors on the local and national level. They cited uncertainty regarding the effects of the Trump administration’s tariff policies and a slowing decrease in inflation nationally. Locally, sales tax collections have fallen and home appreciation has decreased to 5.1% in 2025 compared with a rise of nearly 9% the previous year.

Chesterfield is also in a wait-and-see mode to monitor how any proposed reductions in federal funding might affect county programs. While federal contributions are a small part of Chesterfield’s budget, those dollars finance social services and other programs.

“We cannot react to what we don’t know,” Casey said. “So until definitive funding issues are provided to us and businesses and our nonprofit partners are also aware of their impacts, we will continue to forge ahead in an austere manner.”

One of the big line items in the proposed budget is an allocation of $426 million for a first phase of construction on a new water treatment plant on the Appomattox River, which would be the fourth water source for Chesterfield. The project has been in the works for years and isn’t a response to the recent regional water crisis.

Chesterfield supervisors, who received a briefing on the budget proposal Wednesday afternoon, are expected to vote on adoption of the budget April 9. The 2026 fiscal year starts July 1 and will run until June 30, 2026.

A public hearing on the budget is planned for March 26 and will follow multiple community meetings planned in the coming days.

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