If Isle of Wight County sees its population grow roughly 1% to 3% annually, at what point would increased tax revenue fail to offset the added cost to the county’s schools and other public services?

It’s a question Isle of Wight’s Planning Commission posed last year to TischlerBise, the Bethesda, Maryland-based consulting firm that worked on the county’s 2020 “Envisioning the Isle” comprehensive plan. Now, a committee tasked with drafting the plan’s five-year update has its answer.

TischlerBise Vice President Julie Herlands presented her findings to the commission on April 8, modeling three scenarios, one based on a 0.8% annual residential growth rate, one assuming 2% and the third assuming 3%.

All three are based on current tax rates and an estimated 41,423 residents across just over 18,000 existing housing units in the county as of 2024.

The 2% scenario, which also assumes 1% annual increases in nonresidential growth, projects 8,752 additional housing units and 20,224 more people by 2044. Both figures reflect a nearly 50% increase.

That influx is projected to bring with it just over 2,000 new jobs and over $420 million in additional county revenue through 2044, according to TischlerBise. But it would also cause a need for more than $427 million in additional funding for schools, parks and other public services, resulting in a $7.2 million net deficit. The cost of providing these additional services is projected to exceed the increased tax revenue sometime during or after 2036.

A 3% annual residential growth rate, even with an assumed 1.5% increase in nonresidential growth, could push the breaking point four years sooner to 2032. Despite over 3,100 projected new jobs under the 3% scenario, the cost of public services would exceed the resulting tax revenue by $24.6 million by 2044.

The 0.8% model, which Herlands called a “base growth” scenario, was the only one to show a net positive ratio of tax revenue versus new costs from the influx.

It projects an additional 3,224 housing units and an additional 7,451 people. Both figures reflect roughly 18% increases.

Isle of Wight County Schools, which had 5,519 students enrolled divisionwide as of Sept. 30, according to Virginia Department of Education data, could expect just over 1,100 additional students, or a 19% increase by 2044 under the 0.8% scenario. That 20-year increase grows to just over 3,000 students, or 54%, under the 2% scenario and to 4,999 students, or 90%, under the 3% scenario.

Herlands said her projections are based on 2024 dollars and don’t account for inflation.

“Any kind of external shock to the economy, to the financial industry … is going to potentially affect even the base year scenario, so this is not meant to be a prediction or a forecast but a hypothetical ‘what if’ scenario,” Herlands said.

 

Which scenario is the most likely?

According to differing methodologies used by the U.S. Census Bureau and the University of Virginia’s Weldon Cooper Center, Isle of Wight saw closer to 2% year-over-year growth in 2022 and 2023, making it Virginia’s sixth fastest-growing county. The surge appears to have tapered off in 2024, with Weldon Cooper data released Jan. 27 showing a less-than-1% year-over-year increase from July 30, 2023, through the same date in 2024.

The growth rate could again rise. The first phase of the 812-home Mallory Pointe development under construction off Battery Park Road in Smithfield is set to see its first houses this year, while another 60-home development, Windsor Station, is underway off Shiloh Drive in the town of Windsor. The Crossings at Bartlett Station, a mixed-use development anchored by Carrollton’s newly opened Publix grocery store, is approved for up to 240 condominium units and 52 single-family homes in its under-construction residential phase. The 340-home South Harbor and 118-home Church Square age-restricted developments are also still building out.

Last year, county supervisors also approved the 615-home Sweetgrass mixed-use development off Benns Church Boulevard. The town of Smithfield and the county also have pending applications for new and expanded developments that, if approved, would add over 2,000 additional units across the northern end of the county.

Isle of Wight County Schools, which in March contracted separately with TischlerBise to generate similar long-term enrollment projections, had last fall, using its own data, forecast last fall that its five northern-end schools would be at or above “program capacity” if and when 10 proposed and approved-but-unbuilt housing developments are completed. Program capacity refers to state-mandated class size limits rather than maximum occupancy per fire prevention codes.

 

What isn’t accounted for?

Herlands said her scenarios were based on revenues and expenses specific to Isle of Wight County, not its two towns. As such, the data does not show whether Smithfield or Windsor would see growth-related expenses exceed the revenue generated by each town’s share of the prospective housing subdivisions and commercial developments.

Herlands told the commissioners the data also did not delve into what percent of the projected population influx under each scenario would be tied to age-restricted developments, which would result in little to no impact on school enrollment.

County Supervisor Renee Rountree – whose call for a “growth management” task force in 2024 morphed into what became the comprehensive plan stakeholder working group that operates under the Planning Commission – was in the audience at the April 8 meeting and asked whether the revenue projections had taken into account what percentage of the new housing would be owned by veterans exempt from taxation under a recently expanded state law. Herlands told her the revenue projections did not make any assumptions regarding veterans’ tax exemptions.

County Administrator Randy Keaton’s proposed 2025-26 budget expects $3.6 million in tax revenue to be uncollectible due to the county’s tax relief programs for the elderly and disabled and the state-mandated tax exemptions for disabled veterans and surviving spouses of soldiers killed in action. Isle of Wight, according to Keaton, is the sixth most impacted locality in the state with roughly 4.5% of its tax base exempt.