There’s both good news and bad news for Fairfax City homeowners in the FY 25 budget adopted last week by their City Council. Residential real-estate tax rates are rising slightly, but not by as much as was initially proposed.
When former Fairfax City Manager Rob Stalzer unveiled his proposed budget in February before he retired, he recommended the real-estate tax rate be increased by 1 cent per $100 assessed valuation, raising it from the current $1.025 to $1.035.
But after various motions, votes, amendments to motions, and more votes, last Tuesday, May 7, City Council decided instead to hike this tax by just a half-cent. So effective retroactively on Jan. 1 of this year, Fairfax’s real-estate tax rate is $1.03 per $100 assessed valuation.
Since the assessed value of the average Fairfax City home has just increased by 2.63 percent, that alone will raise a homeowner’s tax bill by $162/year. This amount, coupled with the half-cent tax-rate increase, will result in the average homeowner paying another $31 for a total of $193/yr. more in real estate taxes.
In addition, 6-percent increases to both the City’s stormwater utility and wastewater utility fees were also approved, costing the average homeowner an estimated annual increase of $9.15/year for stormwater and $20.18/year for wastewater. And although the City classifies these items as fees, not taxes, they still count. So combined with the jump in real-estate taxes, the average residential taxpayer will be paying some $222/year more in fees and taxes.
The wastewater-utility rate increase of 6 percent goes toward paying the City’s 6-percent share of capital-project costs required for Fairfax County’s Noman Cole wastewater-treatment facility, plus other capital and operating costs there. And the 6-percent stormwater-utility fee hike is to support the utility’s capital-improvement and operating costs.
The City’s Commercial and Industrial real-estate tax rate remains unchanged at 12.5 cents per $100 assessed valuation. And the personal-property tax rate will also stay the same at $4.13 per $100 assessed valuation.
However, the Old Town Service District add-on, real-estate tax rate will rise from 4 to 8 cents per $100 assessed valuation, and some of it will help fund the City’s many public events held in Old Town Fairfax. Chief Financial Officer J.C. Martinez said this increase is anticipated to generate approximately $383,758.
In addition, the new budget contains a 3.5-percent merit increase, effective Jan. 1, 2025, for eligible general-scale employees. A 2-percent market-rate adjustment to general pay scales will take effect on July 1, as will a 1-percent cost-of-living adjustment for public-safety employees, plus the programmed, annual step increase for public-safety employees who were moved to the amended step system. These increases help Fairfax maintain parity within the region and aid in greater recruitment and retention of City employees.
Prior to adopting the budget and each specific tax and fee, Council members discussed some of budget’s contents. For example, Martinez said the stormwater-utility fee of $28.80 per billing unit was originally set in December 2021 when this utility was created. The 6-percent rate hike to $32.35 per billing unit is expected to yield some $3.1 million.
Councilmember Jeff Greenfeld asked what are the priority projects that this additional money would help fund, and Public Works Director David Summers said Council will receive an update on all these projects in early 2025.
Councilmember So Lim wanted City staff to look at some possible tax breaks for nonprofits and people with disabilities, and Fairfax Mayor Catherine Read noted that stormwater-utility payments are fees, not taxes. Council then approved the fee hike, 5-1, with Lim voting no. She did, however, vote with her fellow colleagues in approving the wastewater-utility, user-rate increase unanimously.
Regarding the real-estate tax rate, Councilmember Jon Stehle made the motion to reduce it a half cent from the proposed rate of $1.035, with Lim seconding. That means less budget money for some local nonprofits, plus the City’s Homelessness Task Force.
Greenfield then proposed a three-fourths-of-a-cent reduction, instead, with Kate Doyle Feingold seconding. “This puts a pause on the nonprofit grants,” said Greenfield. “I believe we need to have a competitive process in place before we fund these grants.”
However, Councilmember Tom Ross stressed that the federal government does provide criteria that nonprofits must meet. Greenfield’s motion then failed by a 4-3 vote, with Read breaking the Council’s 3-3 tie.
“We need to dive right in and make sure the nonprofits are getting their funding,” said Councilmember Billy Bates. The Councilmembers then returned for a vote on Stehle’s original motion for a half-cent reduction, and it passed 4-2, with Greenfield and Doyle Feingold voting no.
After that, Stehle accordingly moved to set the real-estate tax rate at $1.03 per $100 assessed valuation, and it passed unanimously. Read then thanked the Council, City staff members and both the former and current City Manager, Laszlo Palko, who “worked so diligently to get this budget across the finish line.”