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Fairfax County’s real estate tax rate would stay unchanged under a proposed $5.98 billion fiscal 2027 budget, but rising assessments would still add an estimated $357 to the typical homeowner’s annual bill.

County Executive Bryan Hill presented the spending plan to the Board of Supervisors on Feb. 17, opening a budget process that will run for about two and a half months.

“Fairfax County is stable, competitive and positioned for growth,” Hill told supervisors. “We are stabilizing and we are also advancing.”

The proposal keeps the real estate tax rate at $1.1225 per $100 of assessed value. Overall assessments are projected to climb 3.6%, driven largely by residential properties, increasing estimated real estate tax revenue to $3.856 billion.

Total revenue is expected to grow 3.7%, the county’s smallest increase since the 3.5% gain recorded in fiscal 2022. Hill nevertheless characterized it as a healthy increase.

Personal property tax collections are projected to rise 3.1% to $828.5 million. The food and beverage tax that took effect Jan. 1 is expected to generate $135.8 million during its first full fiscal year.

The plan also anticipates sales-tax revenue increasing 1.5% to $258 million and business, professional and occupational license tax revenue growing 1.5% to $218.5 million.

Raises paired with more than 100 position cuts

All county employees would receive a 2% cost-of-living adjustment, with additional raises provided under collective bargaining agreements.

The county’s living wage for its lowest-paid workers and contractors would increase to $18.50 an hour, another step toward a planned $20 hourly rate in fiscal 2029. Hill said the increases are needed to keep Fairfax competitive in a tight labor market.

At the same time, the proposal eliminates more than 100 positions and cuts $32.9 million in spending. County officials would try to place affected employees in other jobs.

Programs targeted for reductions include a pilot initiative helping low- and moderate-income residents make home repairs and the Health Department’s speech and hearing services for children.

Debt-service spending would rise by nearly $19 million following the January sale of $400 million in county government and school bonds.

The cuts follow a December forecast that put the budget shortfall at $131.5 million, partly because of declining office property values. Since then, the commercial real estate outlook has shown signs of improvement.

Nonresidential property values are now projected to increase 0.92%, their first gain in three years. The county’s direct office vacancy rate has also declined for the first time since 2019 as older buildings are demolished or converted and developers reduce speculative construction.

More than 900,000 square feet of office space was demolished in 2025, Hill wrote in a message to supervisors. By comparison, 320,000 square feet is under construction, and that space is expected to be fully occupied when completed.

Hill said the shrinking office inventory offers hope that the commercial market has reached a turning point.

School request remains $43.8 million short

Fairfax County Public Schools would receive about $94.6 million in additional operating support under Hill’s plan. Superintendent Michelle Reid requested an increase of $138.4 million, leaving a $43.8 million difference.

Reid’s January proposal sought $2.84 billion in operating support from the county government, equal to roughly 69% of the school system’s entire budget. Hill’s plan would provide about $2.8 billion in overall operating transfers.

Hill said additional state education money could help close the gap. Mason District Supervisor Andres Jimenez expressed the same hope, saying officials were looking to their partners in Richmond.

A state budget proposed by former Gov. Glenn Youngkin before he left office in January would provide FCPS with approximately $106 million, according to Hill. Although that funding would give the county more flexibility, the portion designated for compensation would support only a 0.4% teacher pay increase.

Hill said he hoped work with state lawmakers and the new administration would produce more funding.

The county proposal also adds $7.5 million to the school construction fund and provides more money for debt service on $230 million in bonds sold in January.

Supervisors weigh tax relief and spending demands

Board Chairman Jeff McKay called the proposal “a breath of fresh air” compared with budgets from recent years, saying recent economic trends offered a glimmer of hope despite continued headwinds.

McKay said he would explore lowering the real estate tax rate to offset part of the increase caused by higher residential assessments.

Hill set aside $23.2 million in unallocated funding that supervisors could direct toward tax relief, affordable housing, more school support or restoration of proposed cuts.

Several supervisors urged caution about declaring an economic recovery. Mount Vernon District Supervisor Dan Storck said economic trends remain uncertain and noted that retailers have been struggling.

Springfield District Supervisor Pat Herrity welcomed some program reductions but said they were insufficient to ease the pressure on homeowners. He said taxes had risen 50% over the past decade and cautioned against suggesting that county budgets had truly been reduced.

Sully District Supervisor Kathy Smith countered that residents often do not recognize the full range of services provided by local government or the cost of delivering them.

Hill said county staff would keep reviewing economic data as the regional outlook develops.

Final budget vote set for May

Supervisors and the Fairfax County School Board are scheduled to discuss budget issues in the coming days.

The Board of Supervisors will establish the maximum tax rates under consideration on March 17. Public hearings on the budget and tax rates are planned for April 14-16, followed by the board’s budget markup on April 28 and final adoption on May 5.

The fiscal 2027 spending plan will take effect July 1.

Beyond the next budget year, Hill warned of slowing growth in housing values, rising employee and retirement expenses, higher debt-service obligations and increased transportation costs.

“These pressures are real,” he said.

County staff are expected to give supervisors their next economic update in April.