Williamsburg administrators painted a rosier financial picture for fiscal year 2027 during a Friday retreat, though money is still tight.
The city’s paying more for salaries, materials and contractors while preparing for work on the new downtown library. Property appraisals are rising, expected to bring in an additional $1 million to work with, but the rate is slowing in recent years. Sales tax dollars are also increasing, but not as quickly as hoped.
Still, City Manager Andrew Trivette feels better about the budget than last year’s. He called that the most difficult one he’s crafted for Williamsburg.
“I think we’ve done the good work of budgeting here by taking that long list of asks and slimming it down to what we can accommodate with the revenues that we have,” he said.
Williamsburg in January implemented new taxes on meals, lodging and tickets. The increases, alongside annual adjustments to utility fees, are part of a strategy to fix a “structural imbalance” in the city’s capital upgrade funds that would have dipped into the red.
Trivette said the city prevented that, but still had to cut several projects, including $30 million this fiscal year and $14 million in upgrades in 2027. He said staff will consider returning some projects to its plans if revenue improves as the city prepares for a tourism bump for the 250th anniversary of the Declaration of Independence.
“While we may have some challenges, time will smooth things out,” Mayor Doug Pons said.
Williamsburg’s current budget draft totals about $120 million, up from $103 million for 2026. The largest increases are for employee raises, about $1.5 million; 14 new hires, about $1.2 million; and Williamsburg-James City County Schools, about $1.8 million.
Health insurance costs are still an unknown; Trivette expects to get estimates by early March. James City County is preparing to pay 9% more for health insurance, while WJCC is facing a possible 16% jump, part of a national trend of rising health costs.
Residents can also expect higher utility fees again this year and varying annual rate increases for costly infrastructure upgrades the city announced last year. This year’s 7% increase will cost average users about $3 more per month.
Revenue growth isn’t as tight in James City County, though funding requests amount to double the additional dollars coming in.
Board of Supervisors members weren’t ready to discuss how to strike the balance at their retreat on Thursday.
“It’s just going to be a lot of very tough conversations,” said Vice Chair Ruth Larson.
James City County expects $13.5 million more in property taxes than in fiscal year 2026, driven by a nearly 12% average jump in property values. Including other funds, the county will have about $15.5 million more to work with in 2027.
One million could go toward health and dental insurance. Four and a half million is for school funding, which board members agreed to in a joint agreement with the city signed in October. Employee raises and market adjustments are estimated at $3.7 million.
The county is also looking at additional debt service and project expenses, new hires, outside agency funding and other requests, altogether totaling more than $31 million. The board will need to trim more than $15 million in budget requests or find more money.
Its options, however, are limited. James City County’s lodging and cigarette taxes are at the max allowed by the state. It doesn’t have the authority to add taxes to event tickets, though a bill in the General Assembly could change that. That leaves property or meals taxes. With the moratorium on meals tax increases ended in January, the county could add 2% to its current rate of 4% before maxing out.
Board Chair John McGlennon said he’s weighing all options before making a decision.
“That is one that is a shared tax on both residents and visitors, and so that’s always helpful,” McGlennon said of meals taxes.
An increase to 6%, if approved, would put James City County just below Williamsburg’s 6.5% rate and in line with localities such as Poquoson, Virginia Beach and New Kent County.
James City County and Williamsburg’s administrators will share budget proposals with residents in March before adoption by June.
