Fairfax County lawmakers Tuesday approved a budget that raises the residential tax rate by 3 cents, a reflection of the lingering economic impacts of the pandemic and uncertainty over the Virginia state budget.
Fairfax’s increase in the residential tax rate, to $1.125 per $100 of assessed value, means the annual tax bill for county homeowners will increase by an average of $450. The move came as revenue from the county’s struggling commercial office sector remains weak while Fairfax schools requested more funding due to higher enrollment and other pressures, most of which the board met by allocating an extra $165 million to the school budget.
Under the plan, county employees will see raises of between 3.25 percent and 6 percent, with some getting extra merit boosts in pay. A variety of county services will be cut, including a net reduction of 42 jobs, either through retirements or by not filling open positions, to save $34 million.
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The Board of Supervisors approved the budget on a 9-1 vote without comment, with Supervisor Pat Herrity (R-Springfield) opposing.
“We understand the pressure this will place on our residents and this budget strives to find a balance between taxing levels and addressing our most urgent priorities,” Jeffrey C. McKay (D), the board’s chair, said during a “budget markup” meeting last month.
With remote work keeping office vacancies high, Northern Virginia localities have had to find ways to make up for the loss in commercial tax revenue while trying to maintain the quality of schools and other services.
Neighboring Arlington County increased its tax rate for homeowners by 2 cents last month, to $1.033 per $100 of assessed value, while the city of Alexandria raised its rate by 2.5 cents, to $1.135 per $100 of assessed value.
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In the exurbs, Prince William and Loudoun counties — less affected by the transition to remote work and buoyed by tax revenue from data centers — cut their tax rates for homeowners.
Prince William’s board last month lowered the residential tax rate by 4.6 cents — to $0.920 per $100 of assessed value — after raising its tax rate on the equipment inside data centers by 72 percent, a move expected to generate an extra $60 million.
Loudoun County, home to the largest concentration of data centers, lowered its residential tax rate by a penny, to $0.865 per $100 of assessed value.
Fairfax’s board avoided an even higher tax increase proposed by County Executive Bryan Hill earlier in the year after revenue projections from the county’s financial investments and other resources grew by about $11 million.
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During last month’s meeting, several supervisors expressed frustration with the ongoing negotiations over the state budget between Gov. Glenn Youngkin (R) and the General Assembly. Last month, the state’s leaders agreed to set aside that spending plan and work toward a new budget document by the middle of this month.
In an April 19 letter to county supervisors, Hill noted that Youngkin’s budget amendments eliminated additional state funding for Metro that the General Assembly had approved, leaving the county to cover its entire $18 million obligation to fund the struggling agency.
McKay said state funding for schools has also been lacking.
“Fairfax County Public Schools, as with all schools across the state, remain significantly underfunded,” he said.
Those pressures are impacting county homeowners, said Supervisor Dalia A. Palchik (D-Providence), arguing for the county to do more to diversify its tax base.
“We currently rely on our real estate taxes to fund 66 percent of our budget and that is becoming harder and harder for so many in our community,” she said. “Hopefully, we’re not faced with harder budgets than this one, though, right now, it is looking very likely that is the case.”
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