Northampton hears report on anticipated revenues in coming budget

Northampton County Finance Director John Chandler presented the FY26 budget revenue projections during Tuesday night’s work session in Eastville, highlighting an expected 4.07% increase in overall revenue. The total estimated revenue for FY26 is $46.1 million, up from $44.3 million in FY25, with approximately $1.6 million in “new money” flowing into county coffers. The budget reflects an increase in property tax revenue and adjustments in sales and occupancy taxes, while federal and state funding remains steady.

Local revenue is projected to rise 7.31%, reaching $28.2 million, primarily due to increased collections from general property and personal property taxes. Chandler noted that late tax payments have been on the rise, which he attributed to residents delaying payments during COVID-19 and the recent hiring of a new collection agency. He estimated that the additional $379,000 in late payments is likely a temporary fluctuation.

State funding is expected to increase by 6.01%, totaling $2.9 million, with additional support from the Compensation Board and state grants. Federal funding remains unchanged at $133,108, following a significant reduction in previous years. Non-revenue transfers, including fund balances and interdepartmental transfers, are expected to reach $1.79 million, reflecting a 0.67% increase from FY25.

Several key tax categories will see adjustments. Real estate tax revenue is expected to rise by $817,803, largely due to new construction assessments and a 97% collection rate. County Administrator Charlie Kolakowski reported that 157 new homes were built in Northampton County during the last fiscal year, each with an average value of $540,000. Personal property tax revenue is projected to increase by $518,594, reflecting updated assessments and higher collection rates.

Conversely, sales and use tax revenue is expected to decline by $150,000, which Chandler attributed to shifting economic conditions and reduced large-item purchases. Transient occupancy tax revenue is also projected to fall by $130,000 in Northampton County, while Cape Charles’ portion is expected to increase by $100,000, reflecting changing tourism dynamics. Meanwhile, food and beverage tax revenue is forecast to increase by $60,000, benefiting from the 1% tax hike implemented in January 2024.

Debt service expenditures are expected to remain manageable, accounting for 10.15% of total expenditures, which is well within the county’s 12% debt policy limit. Northampton County’s outstanding debt at the beginning of FY26 is estimated at $4.38 million, with an additional $60.84 million in school-related debt. The unassigned general fund balance is projected to be $9.82 million, maintaining the county’s policy of keeping reserves above 10% of total operating expenses. The County’s overall debt as a percentage of assessed County real estate also is projected to fall, despite the school debt, to 1.9%.

The Board of Supervisors will continue reviewing the budget over the coming months before finalizing and adopting the FY26 budget. Board Chair John Coker hinted at the end of the discussion expenses could be higher than the additional revenue in the coming budget cycle.