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Fairfax City homeowners will face higher tax and utility bills under the city’s fiscal 2026 budget, although officials stopped short of a much steeper proposed real-estate tax increase.
The City Council adopted the budget and the fiscal 2026-2030 Capital Improvement Program on May 6. The plan raises the residential real-estate tax rate by 2.5 cents, from $1.03 to $1.055 per $100 of assessed value.
Acting City Manager Bryan Foster had proposed a 9.5-cent increase in February, which would have set the rate at $1.125. Council and city staff subsequently reduced the increase.
Combined with rising home assessments, the approved rate is expected to increase the average household’s real-estate tax bill by $959. Stormwater and wastewater rates will each rise 6 percent to support the city’s utility infrastructure and services.
The budget leaves the meals tax unchanged at 4 percent. Foster had recommended raising it to 6 percent, prompting opposition from residents, restaurant owners and the local business community.
At an April 22 public hearing, owners of Hamrocks, P.J. Skidoos, Dolce Vita, Patriots Pub & Grill and Mackenzie’s Tunes & Tonics warned that the increase would raise customers’ costs and hurt their businesses. Central Fairfax Chamber of Commerce Executive Director Jennifer Rose said it would also damage small businesses and the city’s economic-development efforts.
Avoiding the larger tax increases required other cuts. Eligible employees on the general pay scale will receive a 2-percent merit raise instead of the customary 3.5-percent increase Foster recommended.
The city also eliminated its usual $392,000 allocation for a home-repair loan program operated by the City of Fairfax Renaissance Housing Corp. with MainStreet Bank. The program provides qualifying homeowners with two-year, interest-free loans to repair aging homes, but it received no funding in the new budget.
Other reductions include $400,000 for travel and training, $100,000 for nonprofit grants and $1 million that would have been used to fill non-urgent staff vacancies.
The approved budget for all city funds totals $290.2 million, up 10 percent from fiscal 2025. It covers the General, Capital Projects, Old Town Service District, Transportation Tax, Cable, Wastewater, Stormwater Utility, Transit and American Rescue Plan Act funds.
The $198.6 million General Fund represents a 9.9-percent increase over the current fiscal year. It preserves an unassigned fund balance of 17.7 percent, helping support Fairfax’s AAA bond rating.
The city’s school-tuition contract is fully funded at $71.4 million. That is an increase of $12.6 million, or 21.4 percent, over the previous year.
The budget also fully funds 126 of the Capital Improvement Program’s 130 projects, providing $98.1 million in fiscal 2026 and $614.9 million across fiscal years 2026-2030. Parks and Recreation receives $9.6 million, Transportation receives $31.9 million, and $200,000 is set aside for an efficiency audit.
Foster said the final plan invests in Fairfax’s future while maintaining financial balance and essential services. He also cautioned that constrained resources are likely to create additional fiscal challenges in coming years.