If the current version of the FY22 budget is approved, Richmond County employees will get raises and residents won’t see any service cuts and tax increases.
The county’s finances fared far better than expected during the pandemic. This time last year, county leaders were bracing for the potential of a financial crisis on par with the Great Recession of 2008, but it didn’t materialize.
Now, county leaders are considering over $1.1 million of additional expenditures, which will push the FY22 budget to about $27.9 million.
“Ninety percent of that budget increase is driven by salaries and health insurance,” said County Administrator Morgan Quicke.
Richmond County Public Schools
The current budget proposal allots over $16.6 million for RCPS, a $700,505 increase.
At that level, education will account for 60% of the county’s budget, and about 65% if the school system’s debt service is included.
RCPS’ budget includes $75,000 for a new mandated guidance counselor position, a 4 percent raise for all employees plus an additional step increase for teachers based on years of service.
Most of RCPS’ cost increases will be covered by over $457,000 in new state funding and $70,000 in federal funds. But Richmond County will contribute $100,000 more from its coffers, marking the largest increase of funding the county has made to the school system since FY14.
“Richmond County is entertaining that additional investment to support salary improvements because its teacher salaries are lagging behind those in surrounding counties,” Quicke explained.
In total, under the proposed budget, Richmond County would be contributing $4.9 million of local money to the schools in FY22.
However, the school board and county administrator are priming the board of supervisors to support a three-year plan that will continually invest more in teachers.
To catch up and keep up with surrounding localities, it’s estimated to cost between $750,000 and $1.2 million over that three-year span.
Raises for county employees
Virginia approved 5 percent raises for state-supported local employees, which includes constitutional officers and their employees. So, the FY22 budget calls for all full-time county employees, except RCPS staff, to receive 5 percent raises, which would be the first countywide pay increase since a 3 percent hike in FY20.
The budget also recommends merit raises, increases to the retention and longevity plan for Sheriff and EMS departments and raises for part-time EMS personnel.
The county is “chasing” pay for EMS personnel, also trying to make that competitive with departments across the region.
To implement the wage increases and pay other employees costs, such as Social Security, FICA, and VRS will cost $195,000.
Quicke believes the county owes the proposed raises to its employees. Richmond County employees “have done a really great job” and none of the offices closed during the pandemic, he explained.
For about 90 days, there wasn’t public access to county offices but there wasn’t one day where we weren’t able to serve the public. A lot of localities still aren’t face-to-face. But we learned to operate differently and we’re face-to-face in Richmond County, he added.
Health insurance costs
Health insurance remains one the county’s biggest budgetary challenges. This year, costs are set to increase 12.3 percent, raising the bill to cover county and school employees by over $150,000.
This is the second year in a row this one expense increased over 10 percent, which is “concerning” for the county.
Richmond County is soliciting bids to see if better products and prices are available, but Quicke said he isn’t optimistic, noting that the current program is designed for local governments.
“But we owe it to our employees and our taxpayers to see if there’s another option offering a similar product for less cost,” he said.
No tax hikes
Despite the additional expenditures, Richmond County’s FY22 budget doesn’t recommend hiking rates for personal property, real estate, machinery and tools or merchant’s capital taxes.
Quicke describes the current tax rates as conservative, and explained that 10 years ago Richmond County had a fairly high tax rate compared to other counties. But the other localities have caught up because over that decade counties in the Northern Neck or Middle Peninsula, on average, have increased tax rates 10 to 15 percent.
“We’ve raised taxes exactly one time since 2011 by three cents. So, we’re happy. We don’t want to overtax…We’re not looking to have the top tax rate at all. We’re proud of how we’ve been able to manage over the past 10 years,” Quicke said.
However, for the second year, Richmond County residents will pay a higher car tax because the credit vehicle owners get will be reduced from 46 percent to 45 percent.
The car tax credit is a state program that gives Richmond County $804,000 a year to distribute among all vehicle owners to lower their car tax. But the population, number of vehicles and vehicle values are growing. If the county didn’t change the rate, it would need to pitch in $14,000 of local money to cover the shortfall, which Quicke is staunchly opposed to doing.
“We are not going to subsidize the state of Virginia for a program they put out and can’t figure out how to manage,” he said.
Thus far, COVID-19 hasn’t taken a toll on county revenues for two primary reasons. First, Richmond County’s budget isn’t heavily reliant on transient people like the localities heavily dependent on tourism. Second, the $1.5 million in federal CARES Act funding went a long way, explained Quicke.
Meanwhile, one of the county’s major revenue sources, local sales taxes, was strong over the past year because people were spending a lot, he added.
For FY22, Richmond County is only expecting one decline in local revenue sources—interest on deposits.
The county has seen a steep drop in earnings from interest in recent years. Just two years ago, Richmond County earned $70,000 “just making money on our money,” Quicke explained. But this year, even though the county has more money in the bank, interest payments are projected to drop to $20,000 due to the low interest rates.
Still, the county is expecting an overall increase in local revenue with the largest boost attributed to an extra $250,000 projected from local sales tax bringing that total to $1.5 million for the year.
An additional $61,000 in public service corps revenue is expected thanks to the Commissioner of the Revenue finding that Richmond City was receiving money for Dominion equipment that should have been coming to the county.
Local revenue sources used to be between $1.3 and $1.4 million. This year it’s going to go to $1.5 million.
Most of the county’s contributions to non-government entities will remain the same, and Richmond County won’t cut any services for the public.
The current version of the budget also includes ramping up areas that had been scaled back last years, such as the $87,000 cut from the Capital Improvement Plan.
The board has done a really good job over the last four years, said Quicke.