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Proposed Budget Focuses on Capital Projects, Increases Real Estate Tax

Copies available at city hall.

Fairfax City staff proposed a FY2012 budget last night that would bump up real estate tax rates to fund rising county contract costs, stormwater projects and other capital improvements.

Want to read over 500 pages of budget details? Pick up a copy at city hall... or just pour over this budget in a nutshell:

  • Total spending will increase 5.8 percent, to $141,637,727, from 2011's adopted budget.
  • Real estate tax rates would go from $0.955 to $1 per $100 of assessed value. The proposed budget would mean an average real estate tax bill increase of 8.2 percent. 
  • One cent of that rate would be used for stormwater maintenance.
  • The city's general fund would increase by 6.3 percent over 2011. This fund is the largest portion of the budget and accounts for city office operating costs. It is funded by property taxes, sales tax, business license tax and state aid.
  • This proposed budget emphasizes the need for capital improvement funding. Some of these proposed improvements include software upgrades, historic property improvements, vehicle and equipment leasing, police and fire vehicle replacement.
  • The stormwater fund would increase by $138.3 percent. City staff urges council members to approve this spending as delaying such maintenance may cause significantly more costs in the future.

Why the hikes? City staff expect the economy to stay in its troubled state. The grim national outlook, along with the likelihood of rising county contracts and ongoing costs from recent bonded improvement projects, make less expensive real estate tax rates a hard sell.

County contract fees for judicial, social services, fire and rescue, and refuse disposal are expected to increase by 4.9 percent. But it's how much the city pays the county to run its schools that makes the difference.

The school budget makes up 40 percent of the city's budget. In 2011, Fairfax City spent $37,267,135, most of which went to paying the county contract. Next year the budget looks to spend $39,458,000, an increase over 2011 of 5.8 percent.

In the last few budget years city employees have seen salary freezes, layoffs and deferred capital spending. Don't expect FY2012 to change much.

City staff recommends adding two full-time positions, a division chief to help with redevelopment projects and the Master Plan for Fairfax Boulevard, and an utility technician to focus on wastewater projects.

Council members have scheduled public meetings to discuss the proposed budget. Mark your calendars:

  • March 15: Public outreach and work session - staff presentations
  • March 16: work session - staff presentations
  • March 22: council meeting - consider real estate tax to be advertised
  • March 29: public outreach and work session
  • April 5: work session - discussion of budget
  • April 12: council meeting - public hearing on budget
  • April 28: council meeting - public hearing on real estate tax rate and budget adoption (THURSDAY)

Editor's Note: Check back for more detailed looks at the proposed budget.

Kim Luckabaugh February 25, 2011 at 01:56 PM
Two things you need to investigate and report: 1) What is the real estate tax equalization rate? As real estate assessments fluxuate, the amount of revenue needed to generate the same dollar income fluxuates. So while they have to announce a "tax increase", it is often not quite as it sounds. During the housing boom they were able to lower rates because the assessments increased so much every year, but they still collected the same amount of money. The same thing goes with tax increases. Now, that being said, they do have to increase revenues to cover items in Capital Budget needs. As the infrastructure of Fairfax ages and the population (and its demands increase), more improvements are needed and that costs money. However, if you are going to report a potential tax increase, it is highly important to report on the equalization rate as it gives the true nature of the tax rate. 2) The City Manager must announce the proposed tax rate, but that doesn't mean that is what the council will decide upon. Every year, the City Manager and Asst. City Manager/Finance Director announce a rate higher than that which the council approves. This point is a critical one to make. The council needs a point to start from in determining the tax rate and relish having the lowest tax rate in the region along with the highest quality of services to residents. How do I know this? I covered city council for nearly 10 years for a local paper and ran for office once myself.
Whitney Rhodes February 25, 2011 at 04:10 PM
Hi Kim. Thanks for the tips. This is only the first in a series I'm doing on the city's FY2012 budget. I'll definitely include those two items in my upcoming stories.
Han-Lin Lee April 21, 2011 at 07:33 PM
Ditto. Fairfax City is unique in the D.C. Metro region because of its unusually large commercial real estate base (thus more tax revenues from local businesses). As a result, the share of real estate tax burden on residents is lower than other jurisdictions in the region. Incidentally, I am also witnessing some signs of life again of new constructions in the City, both residential and commercial. Hopefully in a few years the newly renovated Old Town area will attract businesses back to make it more vibrant as it had been planned to be. Finally, as a personal wishful thinking - why not convert the current Safeway/CVS/University Wings/ABC location to mixed use development with new condos/apartments? The Old Town area need more residents to make the restaurants and shops there more sustainable. Also, it might not be a bad idea for GMU moving some of its classes to Old Town area (why not? especially for partime, professional/graduate level courses). Businesses need consumers - and it could be a win-win for the City.

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