Article Text

Vienna plans to keep its real estate tax rate unchanged under a proposed $55.47 million fiscal 2026 budget, even as rising property assessments are expected to increase the average homeowner’s bill by 7%.

Town Manager Mercury Payton released the spending plan March 5. It includes employee raises, $200,000 toward a potential aquatics and fitness center, and additional funding for higher fuel, utility and vehicle costs.

The proposed budget increases spending by $1.7 million, or 3.2%, over fiscal 2025. That is smaller than the 7.5% increase adopted between fiscal 2024 and fiscal 2025.

Payton described the plan as lean compared with previous budgets and said the spending increase largely reflects inflation. While nearby jurisdictions have considered higher property tax rates to cover operating costs, Vienna intends to work within its projected revenue.

Vienna’s real estate tax rate would remain at 19.5 cents per $100 of assessed value. Property taxes provide about 43% of the town’s general fund revenue.

Assessments are climbing, however. About 43.6% of Vienna homes are now valued above $1 million, compared with 36.4% a year earlier. Another 44.2% are valued between $700,000 and $1 million.

As a result, the average residential tax bill is projected to rise from $2,204 to $2,359. The town expects to collect an additional $847,500 in real estate tax revenue.

Payton attributed the higher assessments partly to Vienna’s continued desirability. The town’s limited supply of newly constructed housing, outside the redevelopment of existing properties, may also be contributing.

Commercial assessments are projected to increase by $25.1 million, reaching $1 billion—a 2.5% gain. Vienna-area commercial vacancy averaged 4.7% at the end of 2024, compared with 13.2% across Fairfax County.

The town also anticipates more revenue from meals, sales and business-license taxes, along with parks and recreation fees. Meals tax collections have performed particularly well amid the arrival of new restaurants and coffee shops and continued business at established dining destinations.

Despite those revenue gains, departments were told to remain as close as possible to their current spending levels and limit new requests.

The budget sets aside $880,020 for employee compensation. General town employees would receive a 2% market-rate adjustment and a 1% merit increase. Sworn police officers would receive a combined 4.5% raise, consisting of a 2.5% step increase and the 2% market adjustment.

The plan also accounts for anticipated increases in fuel, utility and vehicle expenses. Vehicle costs could rise because of planned federal tariffs and elevated steel prices, according to Payton.

Aquatics center gets an initial reserve

Beyond employee compensation, the largest new expense is $200,000 to establish an operating reserve for a proposed aquatics and fitness center.

Town leaders have envisioned building the facility at the former Faith Baptist Church property, now called the Annex, at 301 Center Street South. A consultant estimated construction could cost as much as $26.6 million by 2029.

Vienna has considered temporarily increasing its meals tax from 3% to 4% to help pay for the project. The current rate is the lowest permitted under Virginia law.

The Town Council voted in January to delay a decision on that proposal until Aug. 25, pointing to economic uncertainty stemming from federal government actions.

The Parks and Recreation Department also plans to develop a capital campaign program during fiscal 2026 as another way to support major projects. It remains unclear whether fundraising would replace or supplement a meals tax increase.

After an initial budget discussion March 15, the council was scheduled to hold another work session March 17. Public hearings were planned for April 7 and April 28, with final adoption scheduled for May 19.