Early FY27 numbers show the county is still waiting on the large property-tax payments that will reflect the higher rate supervisors set in April, while the same unfunded disabled-veterans mandate that drove that increase continues to grow by about $400,000 a month.
Stafford County Budget Director Jeff Stamp presented first-quarter FY2027 results to the Board of Supervisors on Oct. 20. The general fund adjusted budget for total revenues and other financing sources is $509.8 million. First-quarter collections were $21.1 million, or 4.1 percent of the adjusted budget.
Property taxes are due in December and June, so those payments are not in the first-quarter total. Local non-property taxes such as meals tax, sales tax and cigarette tax also typically lag by a month or two. Stamp said the low percentage is expected because collections do not arrive evenly through the year. Property taxes and local non-property taxes together account for more than 80 percent of total revenue.
The numbers arrive months after the board locked in the tax rate that funds the FY2027 budget. In February, County Administrator Bill Ashton proposed raising the real estate tax rate from $0.9236 to $0.985 per $100 of assessed value.
Combined with a roughly 10 percent rise in residential assessments that set the median home value at $477,100, the proposal would have pushed the median annual tax bill to about $4,699. Ashton said $40 million in state-mandated tax relief — primarily disabled-veteran exemptions, equal to about 15 cents on the rate — had consumed the reassessment gains.
“The exonerations have eaten up all the increases in the reassessment,” he told supervisors in February. “To get to the exact same base revenue in real estate taxes, we would have to keep the tax rate the same.”
On April 28, the board adopted a lower calendar-year 2026 real estate rate of $0.9675 on a 4-3 vote as part of the FY2027 budget that took effect July 1. Supervisors Crystal Vanuch, Darrell English, and Pamela Yeung voted against it. During that meeting, Vanuch cited Commissioner of the Revenue figures showing the average tax on a home assessed under $500,000 rising from $2,994 in 2021 to $4,764 under the new rate — a $1,770 increase.
Sales tax and meals tax collections for the first quarter exceeded the same period last year. Stamp called the early results encouraging because the two sources help monitor taxable consumer spending in the county.
Cigarette tax revenue is declining compared with the same period in FY2026, while transient occupancy tax is rising. Tourism staff attributed the occupancy-tax increase to a return to the prior growth trend after FY2026 disruptions tied to government meetings and construction-related hotel stays linked to federal spending cuts and freezes.
On the expenditure side, the total adjusted general fund budget is $490.1 million. First-quarter spending was $55.9 million, or 11.4 percent of the budget. Education and public safety together represent 61.8 percent of operating expenditures, or $302.8 million. Spending is also uneven through the year, and education transfers depend on requests from the school system.
Utilities and fuel are under budget for the quarter but will continue to be watched because prices and usage fluctuate. Health insurance is slightly over budget. Staff is monitoring it for impacts on the FY2027 budget and future planning.
Stamp flagged several items for continued attention. The unfunded disabled veterans relief mandate now stands at $33 million and is increasing about $400,000 a month — the same pressure Ashton highlighted in February.
Other areas being watched include vacancy savings, juvenile center expenditures and rising health insurance costs. Looking ahead to FY2028, major pressures include additional school operating and debt service costs, health insurance, paid family and medical leave, mandated increases and keeping public safety pay competitive.
On the housing market, Stamp reported the median sold price of homes was down about 0.9 percent from the prior year, with homes staying on the market approximately nine days. The 30-year fixed mortgage rate was 7.4 percent as of early October. Changes in transaction activity can affect recordation taxes and certain permit revenues. Staff will continue monitoring to assess whether revenue and tax-base growth assumptions remain reasonable for FY2027 and the five-year financial plan. Unemployment is slightly higher than in recent prior years but is not currently an area of concern.
Stamp said auditors’ fieldwork for FY2026 is substantially complete. At this stage, the county projects a positive operating result for FY2026 and expects to meet all financial policy requirements. The full year-end review will be presented with the FY2026 Annual Comprehensive Financial Report at the Dec. 15 board meeting.
