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Vienna homeowners will face higher property tax bills in fiscal year 2027 despite a half-cent rate cut approved by the Town Council on May 18.

The council adopted a $58.3 million budget that lowers the real estate tax rate from 19.5 cents to 19 cents per $100 of assessed value. The spending plan, which takes effect July 1, maintains current staffing and service levels.

At the new rate, the average homeowner’s annual tax bill is expected to rise by about $80 because property assessments have increased. Keeping the existing rate, as initially proposed, would have raised the average bill by approximately $121.

“It’s always a balance,” Mayor Linda Colbert said before the vote. She said the town wanted to reduce the burden on residents while retaining its staff, public safety and service levels.

The council unanimously approved the overall budget, but members divided over how far to lower the tax rate. The 19-cent rate passed 6-1, with Councilmember Roy Baldwin opposed.

Rising assessments drive bills higher

Town Manager Mercury Payton’s original budget proposal, released March 6, assumed the rate would remain at 19.5 cents. After an April 27 public hearing, the council advertised a possible quarter-cent reduction, setting 19.25 cents as the maximum rate it could ultimately adopt.

Finance Director Steven Barlow later presented the half-cent cut as another option. Town officials estimate that lowering the rate to 19 cents will reduce anticipated revenue by $400,000.

Councilmember Jessica Ramakis led the push for the larger reduction, calling it “a modest step” toward a rate of 18.6 cents. That is the estimated rate needed to prevent the average homeowner’s bill from increasing.

“Going to 19 cents, it would be great progress for us,” Ramakis said, while acknowledging that residents will not receive an actual reduction in their tax bills.

Overall real estate values in Vienna increased 6.2% to $7.9 billion. Residential assessments rose 6.8%, while nonresidential assessments climbed 2.2%. Each penny of the property tax rate generates approximately $811,000 for the town.

Real estate taxes account for about 44% of general fund revenue used for daily services and operations.

Councilmember Doug Francis questioned whether the town could absorb inflation-related expenses after cutting the rate. Employee health coverage costs have risen 12.5%, he said, and the approved budget includes another $245,000 for health insurance.

Baldwin said the town should offer some relief after Fairfax County reduced its fiscal 2027 rate by a quarter-cent, but he worried that Vienna might need the additional revenue to cover unforeseen costs.

Councilmember Chuck Anderson supported the half-cent cut while cautioning against assuming property tax revenue will continue growing indefinitely. He suggested the town explore artificial intelligence and other tools to increase productivity as underlying costs rise.

Town identifies ways to close revenue gap

Vienna plans to offset the lower tax revenue by raising planning and zoning fees, cutting $50,000 from an overtime budget largely tied to special events and moving computer-server expenses into the capital improvement plan.

The budget also authorizes the use of as much as $600,000 in surplus revenue from the current fiscal year, although officials said that does not mean the entire amount will be spent.

Barlow said officials will monitor employee turnover, overtime and other expenses throughout the year to avoid drawing unnecessarily from town savings.

The adopted budget is 5% larger than the current spending plan. It provides 3% raises for general employees and 4.5% raises for police officers without adding or eliminating positions.

Barlow said the plan maintains services while adjusting areas where the town encountered problems during the current year.

Water and sewer bills will also rise

The council separately approved new water and sewer rates, including a 1% increase for residential customers. Commercial rates will be realigned with those paid by residents.

Town staff had proposed an overall 4% increase based on a consultant’s analysis.

An average household using 12,000 gallons per quarter will pay about $4 more each quarter, or $16 more annually.

The effect on businesses will depend on consumption. Smaller commercial customers, including restaurants using roughly 18,000 gallons per quarter, are expected to see increases of 1% to 3%. Vienna’s few multifamily properties could face increases ranging from 10% to 20%.

Barlow said staff discussed the changes with the town’s largest commercial water users. Their response was generally neutral and understanding, despite the possibility of larger increases for some customers.

Officials said the additional revenue is needed to cover increasing regional costs for wholesale water and sewage treatment and to support infrastructure improvements.

Councilmember Dann Nash said aligning commercial and residential rates made sense and noted that officials had encountered little resistance from the heaviest users.