Isle of Wight County supervisors had planned to adopt the county’s budget and tax rates for the coming fiscal year on May 9 but postponed the vote to May 16, citing then-unresolved state-level budget negotiations.

Gov. Glenn Youngkin, after receiving the General Assembly’s biennial budget bill in March, proposed more than 200 amendments, which the state House and Senate each rejected. Both chambers reconvened May 13 and passed House budget bills 6001 and 6002, which Youngkin signed that same day.

The Richmond Times-Dispatch reported on May 9 that lawmakers and Youngkin had reached an agreement to use $525 million in state money to pay for the 3% raises for school employees and other Democratic spending priorities included in the March version, without raising taxes. The mandated raise will impact the amount of state funding Isle of Wight County Schools receives.

According to Virginia Mercury, the deal maintains the annual 3% raises but cuts a proposal to expand the state’s sales tax to include digital streaming subscriptions like Netflix and Hulu. An estimated $94 million anticipated in 2025 from the legalization of so-called “skill games” is also out, indicating the slots-style betting machines likely won’t return to Virginia truck stops and convenience stores come July 1.

According to County Attorney Bobby Jones, state law requires county boards of supervisors to vote by May 15 on their budgets and tax rates in order to allow their school systems to begin offering teacher contracts for the next school year, but based on the state’s delay, “I see no harm in a one-day delay,” Jones said.

The county’s budget, as of May 9, called for a 2-cent increase in Isle of Wight’s real estate tax rate, down from the 5-cent increase County Administrator Randy Keaton had initially proposed. Keaton told county supervisors at their May 9 meeting that he’d been able to shave $1.3 million off his original $108.9 million budget proposal by increasing the county’s meals tax to 6% and making a series of budget cuts that included recalculating personnel costs.

Increasing the meals tax from the current 4% to 6% would generate just over $360,000, or the equivalent of a half-cent real estate tax increase, Keaton said. The county’s new meals tax rate would be on par with the towns of Smithfield and Windsor, which charge 6.25% and 6%, respectively.

The county draft budget proposes contributing $32.9 million to its school system’s operating costs, a $2.7 million, or 8%, increase over the $30.4 million supervisors approved last May for the current school year. The draft budget includes an additional $9.5 million in one-time capital expenses.

“The taxpayers are taking on a pretty heavy lift on behalf of the schools,” said Supervisor William McCarty.

McCarty and Supervisor Renee Rountree each discussed “lump sum” funding of the schools rather than categorically funding the school system’s operations, transportation, facilities and other line items. Lump sum funding, according to the county, would also eliminate the School Board’s need to seek the supervisors’ permission if they wanted to move money from one category to another.

The originally proposed 5-cent tax hike, which would have raised the county’s real estate rate to 76 cents per $100 in assessed value, drew opposition from residents at a same-day public hearing.

“It’s totally unfair that only those who happen to own property are saddled with almost the entire expense of running this county,” said Volpe Boykin of Carrsville.

As a result of last year’s real estate reassessments, which saw single-family home valuations rise by 34% on average, “my mortgage went up $280 a month,” said Smithfield resident John Moore.

But alternatives, including Boykin’s proposal to instead raise the $4.50 per $100 car tax rate and Rountree’s proposal to implement a cigarette tax, come with their own share of difficulties.

Smithfield residents, who pay $1 per $100 in car taxes to the town in addition to the county rate, are already paying the highest car tax in Hampton Roads at a combined $5.50 per $100, according to Commissioner of the Revenue Gerald Gwaltney.

When the supervisors last proposed a cigarette tax in 2020, Gwaltney estimated a two- to three-month turnaround time to design and manufacture the stamps that would need to be affixed to locally sold cigarette packs. The 2020 proposal also drew opposition from a handful of convenience store owners.

Isle of Wight, following the 2023 reassessment, lowered its real estate tax for the first time in 16 years from 85 cents to the current 71-cent rate.

“I think our county did a good deed last year by reducing the rate to try to help the citizens, but in the fix we are in right now, we need additional revenue, and we need to raise it through real estate,” said Supervisor Rudolph Jefferson.

School Board Chairman Jason Maresh, in a May 8 email to Board of Supervisors Chairman Joel Acree and Vice Chairman Don Rosie, contends just under $1 million of the proposed $2.7 million increase in school funding would continue the 2% raises the School Board voted in December to give its employees. The School Board accepted an additional $312,221 in state funding last year, with the supervisors voting in December to approve a $475,000 local match, to fund the raises for the remaining six months of the current school year.

Maresh contends the county’s proposed budget “will result with IWCS in a deficit at the onset of FY 25” that will likely require IWCS to cut “existing positions” to offset. His email requests a meeting with the supervisors, Keaton and finance officers from IWCS and the county.

Maresh further shared a document asserting that what’s proposed wouldn’t cover a $53,000 increase in the tuition Isle of Wight County Schools pays to the Governor’s School for the Arts and Governor’s School for Science and Technology, potentially resulting in fewer students from Smithfield and Windsor high schools being able to attend. The document further contends that what’s budgeted would cover only last year’s 2% raises and the proposed 3% 2024-25 raises, and not the annual salary increases teachers receive per the school division’s 35-step pay scale. IWCS previously said, and maintains in the document, that the proposed budget would not fund a proposed patient care technician teacher and require the division to return $90,000 in grant money intended to fund the career and technical education program.

IWCS Superintendent Theo Cramer said at the School Board’s May 9 meeting that the proposed capital improvements maintenance budget, which the county is proposing to keep flat at $250,000, may not be enough to cover repairs to a sinkhole at Windsor High School, a generator at Windsor Elementary, heating, ventilation and air-conditioning repairs at Westside Elementary and a new well at the land lab, a student-run farm. IWCS had requested the amount be doubled to $500,000.

“Those are hundreds of thousands of dollars of needs that we don’t have the luxury to say we’re going to push that off and not fund those things; that’s not an option,” Cramer said. “We would have to find the funding to support these initiatives, and that means we would have to cut in other areas.”

Keaton, at the supervisors’ May 9 meeting, said the $250,000 is held by the county, rather than the schools, until needed, at which point the schools submit an invoice.

Editor’s note: This story was updated at 6:35 p.m. on May 13 with additional details from Isle of Wight County Schools and to reflect the May 13 adoption of the state budget.