Hanover proposes $782M budget, including economic development initiatives

Hanover would fund a tourism office and create small-area plans under its FY26 budget proposal. (BizSense file)

New economic development efforts are part of Hanover’s budget proposal for the coming fiscal year.

The county’s proposed $781.9 million budget features funds to stand up a new tourism office and create small-area plans, alongside allocations for capital projects as well as school division and public safety spending.

The fiscal year 2026 budget would feature $265.4 million (34% of the total budget) for school division operations. Public safety spending would be $111 million (14% of the total budget). The tentative spending plan features a $413 million general fund, which is the main operating fund for the county.

The budget proposal wouldn’t change any of the county’s tax rates. Hanover’s real property rate, which is 81 cents per $100 of assessed value, hasn’t changed since 2007.

The FY26 budget pitch features $350,000 to establish a new tourism office with two employees. The office, which is being funded through lodging tax revenue, would coordinate with Richmond Region Tourism, which has been the county’s main avenue for marketing venues and events for years.

County Administrator John Budesky said that agricultural and sports tourism are growing in the county, as is demand for private venues for events and activities. While some county departments have staffers with tourism marketing responsibilities, the proposed dedicated office would be a first for Hanover.

Also in the budget proposal is $180,000 to finance the creation of small-area plans in multiple areas of the county.

Hanover kicked off the project with the recently started Route 33 area plan. County officials are also planning to create land-use plans on the Route 1 corridor, the area around Kings Dominion and on Pole Green Road, among other parts of the county.

John Budesky

The plans are intended to map out future land-use guidelines and economic development opportunities, in line with the comprehensive plan and in a way that’s sensitive to local residents’ interests. Hanover is embarking on the projects with a mixture of staff work and consultant support.

County and school division staff are slated for a 3% merit-based salary increase in FY26. On the schools side, additional compensation efforts would go into effect alongside the merit raise.

Under the budget proposals, teachers’ annual salaries would start at $55,304 and sheriff’s deputies would start at $63,345.

The latest budget proposal would retain nine fire department positions that had been planned for the coming year but were added in the middle of FY25. The FY26 budget includes 21 new full-time jobs in the county’s workforce, including the fast-tracked firefighters and other positions.

Hanover has more than 1,400 county employees and about 2,800 school division employees.

On the capital improvements side, Hanover has mapped out $687.4 million in projects over five years.

The county plans to fully fund a new $60 million public safety building, which would be home to offices and training spaces for the sheriff’s office and fire department, in FY26. The county plans to allocate $90 million split between two new elementary schools, with a new Mechanicsville Elementary getting funds in FY28 and another in FY30.

Budesky said there weren’t any specific projects or funds in the budget proposal in response to the water crisis that started in Richmond and affected Hanover and other parts of the region earlier this year. He said Hanover was already doing a water utilities master plan project and once that’s completed the county might look to fund water-related projects.

Also still to be determined is how, if at all, Hanover will need to respond to a potential pullback of federal funding support. Days into Donald Trump’s second term as president, his administration issued a sweeping freeze on the allocation of trillions in federal funding, and a judge issued a temporary block of the move amid legal pushback.

Hanover’s FY26 budget proposal includes $24 million of federal funds for things such as free and reduced-price lunches for school children, as well as social services and public safety initiatives. Amid a sense of uncertainty, county officials are still in wait-and-see mode to determine if there will be a shortfall somewhere and how the county might address it.

“We’re all trying to understand what the impacts may or may not be,” Budesky said.

The FY26 budget anticipates general property tax revenues, which include real estate and vehicle taxes, of $274.2 million, which is a 5.2% increase compared to the $260.7 million generated in FY25. Total local revenues are expected to be $468.6 million in FY26.

Budeksy said a factor in the decision to maintain a level real estate rate, as opposed to reducing it, was that Hanover’s home assessment increased 3.3%. Had it been higher, a reduction might have been on the table.

“If my reassessment was 7 percent more than it is, we’d be in a better position to reduce,” he said.

Hanover’s water and sewer fees would increase 5% under the budget proposal, and the county said the typical residential customer’s bimonthly bill would be expected to increase by $7.84.

Following Budesky’s formal budget pitch last week, county officials will next kick off a review of the spending plan. A public hearing is scheduled for April 2. The board is expected to vote on the budget on April 9. The FY26 budget would take effect July 1.

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