Posted on March 27, 2025
Building a resilient budget
As prepared.
Good afternoon.
President Newbille.
Vice President Jordan.
Members of City Council.
City staff.
And, most importantly, Richmonders!
To everyone here in attendance or watching online, thank you for your interest in, and excitement for the future our City.
We have so much to be excited about!!
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Ranked the top American town to visit by CNN
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An absolutely amazing food scene
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Every week we see more progress on Carmax Park, and dream about the next chapter of baseball in Richmond
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the Allianz Amphitheater at Riverfront is nearing completion, and will be spectacular!
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A world class arts community- just last year, we were ranked #2 in the country for Cities with the Best Street Art
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And of course, we have more festivals than could possibly fit on your calendar
Now, op-notch entertainment is nice and national accolades are nice - they tell everybody outside Richmond what we already know. But what really excites me, what I am really proud of, is knowing that every day, together, we are moving towards our vision of:
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A healthy and thriving city with abundant opportunity, where everyone's rights are protected, and where no one is left behind.
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AND an effective city government that stewards resources, meets community needs, and earns the trust of residents.
These are the themes I heard repeatedly when talking to residents last year on the campaign trail. Members of Council, I imagine you all heard many of the same things as well. It's the work I feel called to do, and I imagine it's a big part of why all of us are here.
For these themes, these priorities, to be more than just vision and aspiration they've got to be translated into concrete actions and investments. That's our work.
And so, my team and I have built a balanced, $3 billion budget that reflects OUR shared priorities. It is a fiscally responsible plan that DOES NOT RAISE TAXES.
It reflects our shared vision of an effective city government that carefully and thoughtfully stewards resources - investing in core services and essential community needs: our schools, housing, neighborhoods, public safety, and the effective delivery of services that our residents expect-and deserve.
The work to build a budget is a year-round effort, with the most intense work typically beginning in August, providing a long runway for planning and development. I took office in January, just as some members of Council did, so my involvement in this year's budget process has been extremely compressed.
Budgets are always an exercise in compromise. Needs almost always exceed resources. Our budget is always limited by the City's geographic and historic challenges, but this year, we are building the budget at a time when we as a city face rising costs, and a there's a very uncertain federal landscape.
In fact, as recently as February, we faced a $50M gap between projected revenues and expenses-almost 5% of our total operating budget!
Unlike the federal government, our budget is required to be balanced. Every expenditure has to have the revenue to pay for it.
Closing that gap has taken considerable effort from our dedicated team, and I'd like to thank Interim CAO Sabrina Joy-Hogg, Director of Budget and Strategic Planning Meghan Brown and her budget team, and so many staff members whose hard work helped us meet our obligation to deliver a balanced budget.
So how did we get here?
To build this balanced budget, we've had to address some challenges facing cities across the country, and some challenges that are unique to Richmond.
Fundamentally, we're extremely constrained in our ability to expand our real estate tax base. The entire city of Richmond is contained in about 62 square miles, basically an 8-mile by 8-mile box, tiny in comparison to our regional neighbors. Property taxes from that tiny box are our single largest source of revenue. BUT, contained within that 62 square miles, we have a significant share of tax-exempt property. In fact, Richmond has more tax-exempt real estate than any locality in our region. As Virginia's capital, we host a significant number of state-owned buildings, universities (like VCU), and non-profits (like hospitals, churches, and museums). Our tax-exempt properties are two to five times that of our neighboring counties of Chesterfield, Hanover, and Henrico.
We miss out on $63M in annual revenue because of the amount of state and federal government-owned tax-exempt property in our City. Again: Not being able to collect taxes on what is some of the most valuable property in the City dramatically limits our revenue generating capacity. I'm a proud VCU alum, and I recognize the enormous tangible and intangible impact of our colleges and universities, including VCU. But these are the facts about our limited tax base.
Richmond is also an older City with aging infrastructure impacted by years of insufficient and deferred investment. I know that now, more than ever, we are all committed to the investments required to repair and replace our critical infrastructure.
Our schools also need critical investments, as the City takes on a greater responsibility to offset inadequate funding from state. According to the state's own legislative watchdog agency, JLARC, Virginia school divisions receive 14% less funding per student than the 50-state average.
There are also unsettling signs from Washington, where a new federal Administration is creating uncertainty by slashing federal jobs and upending traditional operations. Changes to the federal landscape could have serious fiscal implications for the Commonwealth, and to Richmond. Our region is home to over 30,000 federal workers, many firms that contract with the government, and federal grant recipients that support many social services, like nonprofit entities that support the unhoused.
Finally, layered on all of that are the broader economic conditions that affect households, businesses, and even local governments. You all have felt the effect of inflationary pressures causing prices to surge for groceries and other retail items. Those same pressures apply to goods and services acquired by the City. In other words, rising costs affect households and governments alike.
Even in the face of those challenges, our responsibility remains the same...
To see our way to an effective and efficient City Hall and a healthy and thriving city. This is our calling, and here's how we're going to do it.
To deliver a phenomenal customer service experience, we must attract and then retain qualified, talented team members. So, we have invested in staff by transitioning to the Virginia Retirement System, requiring living wages, engaging with organized labor, and improving benefit packages. We've invested over $18.6 million more towards our staff in this budget.
To reduce costs and increase efficiency in City Hall, we've created a new role to drive process improvements and culture change throughout our organization: A Chief Transformation Officer. This new role will work with City departments to think through the user experience, reengineer processes, redesign systems, and recommend strategic investments in technology.
Our investments extend into our communities as well. Our public schools and public safety personnel are absolutely critical to a healthy, thriving City. Accordingly, investments in RPS and public safety are among the largest components of this budget. Nearly one quarter of the general fund is devoted to supporting Richmond Public Schools, and about one-fifth of the general fund is dedicated to public safety services like police, fire, and emergency operations.
This budget increases RPS general fund support by $9.6 million over last year, bringing our total investment to a record $248.9 million. While we asked each of our own departments to thoughtfully consider how to help close our initial budget gap, we have proudly funded RPS over and above last year's baseline - in fact, looking back over the last 10 years, we have increased our support for RPS by almost $100 million ($97.3 million to be exact) . And these investments are working - last year RPS K-2 reading proficiency increased by 7%, the 3rd-12th grade SOL scores rose faster in four subjects than the rest of VA, and over the last 2 years, we have added the most newly accredited schools in the commonwealth. But, believe me, I know that the need is far greater. And I will do everything I can to advocate for more at the state and federal levels. I also want to thank RPS Superintendent Jason Kamras and his team for their partnership during the budget development process and their unwavering commitment to the essential work of educating our kids.
In addition to our historic investment in education, we're also prioritizing the public safety needs of neighborhoods across the city. Over the past few years, our police department has been operating well below its target staffing levels. Across the country, we have seen more resignations and retirements, and fewer people entering the profession. We have to address this balance in our growing city.
In this budget, we are funding the Richmond Police Department for 60 additional sworn personnel above their current staffing level of 590 positions. This maxes out the police academy's training capacity-which can reasonably graduate two academy classes each year, or about 50-60 police recruits. While we are adjusting the department's budget to accurately reflect the realistic number of positions they can fill, we are also committing to work with the Chief now and in the future to adjust his position strength as the need arises.
We're also ensuring our public safety personnel are competitively compensated and properly equipped to serve our communities. This budget increases compensation for sworn personnel in the Richmond Police and Fire Departments by an average of 10.3% - that brings us above the regional average in compensation and keeps Richmond an employer of choice for public safety personnel.
Additionally, we've allocated funding for 51 new vehicles for Police, Fire, Public Works, and other departments - including four new fire trucks, six new refuse vehicles, and 16 new police vehicles. Having more police and firefighters doesn't do you any good if they can't arrive on scene. With this investment, we'll be replacing some vehicles that have been with us since the 1990s.
These public safety investments help protect families and communities across Richmond, and THEY ARE WORKING: Last year crime was down across all major categories--with homicides down 18%, and violent crime overall, down 5%.
Another massive priority for our administration is addressing the housing affordability crisis. Every day, I hear from residents across the city about the skyrocketing costs of housing - from new college grads wanting to stay in the city, to coworkers in City Hall, to residents at community meetings. I have shared with many of you that one of my main motivations to run for office was the experience we've had in Church Hill over the last 21 years. My wife and I initially moved into that community in 2004 in search of opportunities to build relationships with people across the racial and socioeconomic spectrum. And for much of the time we've lived there, we have cherished the diverse community that we have been invited into. But in recent years, as development has come, as houses have been turned over, as rental rates have increased, and tax assessments have gone up, many of my low-income neighbors of color have not been able to stay in their community.
That's why we continue our STRONG commitment to affordable housing. Our housing investments for FY 2026 are just shy of $50M! Our plans include:
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23 Affordable Housing Performance Grants which will support the creation of 3,316 affordable housing units,
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$10M toward the Affordable Housing Trust Fund
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and fully staffing the Department of Housing and Community Development.
We're also allocating $7.9 million to the Creighton Court redevelopment project, transforming public housing and creating a new mixed-income community. And we've dedicated $1.3 million to our Eviction Diversion Program, which provides critical support to families facing housing instability and helps keep residents in their homes during financial hardships.
For years, the City has provided financial support to dozens of community partner agencies through the "non-departmental" portion of our budget. That financial support has grown over time, reaching $13 million in the current fiscal year. In the current fiscal climate, that level of funding is simply not sustainable. This year, we've looked for opportunities to invest in programs that support our residents, and provide services that the City can't-all while responsibly stewarding the tax-payer dollar. This year, we're funding almost $9.3 million of partner agency work in housing, human services, stabilizing families, and arts & culture programs. Moving forward, over the next two years, our team will work to develop a more effective, more strategic, and more transparent approach to this funding.
While we are making plans to adjust our approach to partner funding, we're still making targeted investments in programs that directly address our community's most pressing needs. Including:
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$500,000 for the Early Childhood Care and Education Trust Fund to make quality childcare and preschool accessible for families under 200% FPL
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$500,000 for the Richmond Resilience Initiative, extending the guaranteed income program on the heels of some very encouraging results from our pilot phase
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$300,000 for the Health Equity Fund, fueling investments in community-led organizations that are addressing the root causes of health disparities in our city
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$520,000 for the Family Crisis Fund, providing greatly needed relief for housing, utilities, childcare, and other costs and that often make the difference between keeping your housing or not
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$250,000 for the Neighborhood Climate Resilience Grant Program supporting neighborhood-based planning and climate resilience projects
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$300,000 for the Trauma Healing Response Network, supporting community led organizations focused on reducing the impact of gun violence in our city
Our investments in the places, spaces, and built environment reflect our vision for a more connected and thriving Richmond. This budget commits $11 million to the Fall Line Trail, creating a vital north-south connection for pedestrians and cyclists. We're dedicating $21 million for safe and complete streets initiatives, including bike lanes, speed mitigation efforts, and paving.
To be a thriving city, we must continue removing barriers to public transportation and support our residents who rely on these essential services to access jobs, healthcare, and education. That's why I am pleased to announce that my budget invests $9.4 million in GRTC, and I am committed to continuing our support for fare-free bus services!
This budget also reflects my commitment to increasing transportation planning and coordination. We have created a position for a Transportation Director who will be responsible for bringing together internal and external stakeholders to balance the engineering aspects of projects with the community's desire for accessible, walkable and bike friendly roadways.
The revitalization of our important cultural spaces continues with $10.1 million for a multi-use cultural heritage campus in Shockoe and $6 million for Brown's Island, honoring our past while planning new vibrant public spaces .
While building for our future, we must also maintain the essential infrastructure systems that serve every Richmond resident every day.
I maintain regular communication with DPU's director, Dr. Morris about operations at our water treatment plant and the ongoing work to modernize our aging infrastructure. To support these vital improvements and maintain reliable service, this budget does include previously scheduled modest increases to water, wastewater, and gas rates (which were planned before January's Water Crisis).
I understand that any increase affects household budgets, but these adjustments will help ensure that when you turn on your tap or cut on your heat, that the service is there and working properly. It's worth noting that the majority of utility charges remain consumption-based, and our water utility maintains a lifeline rate that both promotes conservation and protects affordability for our most vulnerable residents.
Our plans also include significant spending on planned improvements to our water treatment plant and our water distribution and transmission system. The five-year capital improvement program has more than $60 million in planned project funding, including $38 million proposed for next year. That represents a significant acceleration in funding for water plant improvement projects.
Another $207 million in the five-year CIP is planned for water transmission and distribution system improvements.
That's in addition to a series of other planned investments to enhance wastewater treatment operations, stormwater facility improvements, make needed gas utility system upgrades, and modernize the City's combined sewer overflow system.
And while this budget does not include direct funding for the People's Budget, our participatory budgeting process, we are committed to the concept, and to identifying dollars through our Department of Public Works allocations to support several of the built environment projects that are expected to come out of the ongoing, participatory process.
Richmonders, to build this budget in a thoughtful way, we worked with leaders across every City department and throughout our community, to find creative ways to operate within our means, while also maintaining focus on our core priorities like education, public safety, affordable housing, and continuing to build City Hall into a high-performing organization.
This balanced budget accomplishes that task without raising property taxes, while also addressing the outsized needs of our city.
Still, we all know there's more we must do.
Our economic forecasts indicate that next year will be among the tightest in recent memory.
With a planned-and needed-change in the City assessment calendar, we anticipate FY27 will bring almost no revenue increases from property tax, which, again, is our largest local source of revenue. Despite this, we know our needs will continue to increase.
So we must continue to vigorously pursue economic development opportunities - like the Diamond District, City Center, and Southside investments - to broaden our tax base and capitalize on this City's evolving growth.
We must advocate for ongoing federal support, and for our state to invest more robustly in its capital city - especially when it comes to our public schools.
We must take a hard look at our operations and services within City government, and identify organizational and process improvements - both to stretch our resources and to make sure we use those resources as strategically and effectively as possible.
And we must leverage our existing relationships with our regional neighbors, and the private, philanthropic, and nonprofit sectors.
We've got to use every tool in the toolbox-and even some that aren't - to make sure we're running towards that vision-our shared vision.
I believe that these strategic investments are the steps we must take, today, toward a healthy and thriving city-one with abundant opportunity, where everyone's rights are protected, and no one is left behind.
And I believe that, despite the challenges we're facing, despite the uncertainty surrounding us, we can be optimistic about our City's future. Because I know that each of you-Councilmembers, City staff in the audience, Richmonders watching from home-are dedicated to this place you-and I-love deeply.
Working together we will not only face the challenges ahead of us, but we will truly thrive.
It is an incredible honor to serve as your Mayor.
President Newbille, Vice President Jordan, members of Council, City leaders and staff, and Richmonders-thank you for your committment to our city.
I look forward to our continued work together.
Thank You!
