Lynchburg Budget Proposal Raises Taxes and Spending Despite Surging Surplus
- Lynchburg Herald
- Apr 18
- 4 min read
As Lynchburg residents prepare for higher property tax bills in 2025, it’s important to note that City Council has not yet adopted a final rate. The proposed budget from City Manager Wynter Benda recommends keeping the tax rate at $0.89 per $100 of assessed value — even after reassessments pushed property values up by an average of 20%. City Council still has the power to reduce the rate to $0.767, the “equalized rate” that would avoid a tax increase.
While the city manager is Lynchburg’s administrative officer, only City Council has the authority to adopt a budget and set the tax rate, per the City Charter, which grants Council full control of the city’s fiscal affairs and taxation.
But under the manager’s proposal, Lynchburg residents face a $9.6 million tax hike, a $17.1 million spending increase, and a growing concern: the city is sitting on another large surplus—FY2024 generated an additional $15.3 million surplus of discretionary funds, boosting the revised FY2025 unassigned fund balance to $37,416,215.
A Surplus Too Big to Ignore
Despite inflation and cost-of-living pressures on residents, the city’s finances look strong:
Unassigned Fund Balance at End of FY2024:
$40.36 million — $15.3 million more than adopted in the FY2024 budget
Source: FY2025 Adopted Budget (Page 31) and FY2026 Proposed Budget (Page 31)
Revised FY2025 Surplus Estimate:
$37.4 million — $10 million more than originally adopted
(Adopted: $27.4M → Revised: $37.4M)
These surpluses represent funds not committed to specific obligations — essentially discretionary cash.
According to the Virginia Department of Accounts, the term “undesignated (surplus) balance” is used synonymously with unassigned fund balance when describing funds available in the General Fund. Similarly, the Government Finance Officers Association (GFOA) defines the unassigned fund balance as the most flexible portion of a municipality’s reserves, often available for unexpected costs, emergencies — or to reduce the need for new revenue (like tax increases).
In short: Lynchburg accumulated more than $15 million in unexpected cash last fiscal year and anticipates at least $10 million in additional cash this fiscal year — yet residents are being asked to pay more under the current proposal.
But city officials are denying it.
During a WLNI radio interview on April 18, Lynchburg CFO Donna Witt and Deputy City Manager Greg Patrick denied the existence of a projected surplus.
“We don’t have a $37 million surplus,” Patrick said.
CFO Donna Witt instead characterized the unassigned fund balance as a required rainy-day reserve. However, the FY2026 Proposed Budget (Page 31) clearly shows a revised estimate of $37.4 million for the unassigned fund balance — the exact figure mentioned in the interview.
While not all of that balance is available for immediate use, a substantial portion exceeds the city’s minimum reserve policy. So why deny its existence? That’s a question citizens and councilmembers should be asking.
Spending Jumps in Lynchburg Alongside Tax Burden
The city manager’s proposed FY2026 operating budget is $252.8 million, up from $235.6 million in FY2025 — a $17.1 million (7.3%) increase. The full budget, including the capital improvement program, totals $543.9 million, an 8.2% jump.
Meanwhile, the proposed tax rate of $0.89 per $100 — unchanged from previous years — would still amount to a significant tax increase for residents due to reassessments.
Finance Director Donna Witt confirmed at the March 11 budget work session that holding the rate steady would result in $9.6 million in additional property tax revenue. The rate needed to fully offset reassessments is $0.767.
That’s a stark figure when residents are already squeezed by inflation, rising utility bills, and housing costs.
A Budget of “Needs” or “Wants”?
City Manager Benda described the proposal as “needs, not wants,” pointing to major investments in public safety, infrastructure, and education. Key highlights include:
$60 million over five years for school infrastructure.
$11.1 million in FY2026 + $1.4 million in FY2027 for library renovations.
Utility rate hikes for water, sewer, and stormwater services.
However, many residents question whether these projects — particularly the library renovation — are timely, essential, or appropriately prioritized.
Some city officials have openly criticized the budget’s priorities. At-Large Councilman Martin Misjuns has pointed out that the library renovation comes at the expense of delaying much-needed fire station upgrades. The total cost of the library project now sits at $12.5 million, with no breakdown yet of what portion is for emergency repairs versus aesthetic redesign.
Core Priorities: Are We Losing Focus?
According to the Virginia Municipal League and the Encyclopedia of Federalism, local governments are primarily responsible for:
Public safety (police, fire, EMS)
Roads and infrastructure
Water, sewer, and waste removal
Education (in cooperation with the state)
But this year’s Lynchburg budget includes spending on new communications staff, an ongoing amphitheater contract, and large-scale capital improvements that many argue go beyond these fundamental responsibilities.
During the city’s “Budget & Brews” tour in March, Deputy City Manager Greg Patrick remarked:
“Communities can usually only have two of these three: low density, low taxes, or stable services.”
But for residents who see growing surpluses and escalating bills, it’s not about density or services — it’s about fiscal discipline.
Public Hearing: Here’s How to Participate
📅 Tuesday, April 22 at 6:00 p.m.
📍 City Council Chambers, City Hall (900 Church Street)
City Council will hold a public hearing to receive feedback on the proposed budget and tax rate. All residents are encouraged to participate.
You can:
Attend in person
Call 434-455-3998 and leave a voicemail by April 21
Email the Clerk of Council at alicia.finney@lynchburgva.gov
📘 The full proposed budget and capital plan are available at:
Conclusion
As Council prepares to vote, the question facing Lynchburg is clear:
Should a city sitting on over ten million in unallocated funds — and projecting more — raise taxes and increase spending?
The answer lies not in City Hall, but in the voices of citizens willing to hold their government accountable.