Real Estate Tax Cut Proposed In Alexandria 2022 Budget

ALEXANDRIA, VA — On Tuesday, Alexandria City Manager Mark Jinks proposed a fiscal year 2022 budget with a lower real estate tax rate.

The proposed budget would lower the real estate tax from $1.13 per $100 of assessed value to $1.11 per $100 of assessed value. The city's general fund operating budget would total $767.6 million, an increase of 1.9 percent over the current year. The proposed $2.66 billion 10-year Capital Improvement Program includes increased capital investments for stormwater management infrastructure, redevelopment of the Landmark Mall site, municipal fiber projects, and educational and municipal facilities.

"This is the fourth consecutive year that my proposed budget requires no tax increases or major service reductions to fund ongoing government operations and 100 percent of the Superintendent’s operating budget request for public schools,” said Jinks in a statement. "The budget also proposes a two-cent real estate tax reduction, and provides two alternate budgets for Council consideration, including a budget that would keep the real estate tax rate stable."

The two alternative budget options presented to City Council include a $780.6 million budget if the real estate tax is unchanged, and services and investments are expanded. The other is a $741.7 million budget with a real estate tax reduction of six cents, so that the average residential tax bill does not increase, and significant service reductions.

Even if the current real estate tax rate would stay the same, property assessments will factor into tax bills for property owners. Overall, the commercial tax base declined by 1.96 percent and the residential tax base increased by 6.02 percent. Individual property values may have increased, decreased or be unchanged.

The budget also accounts for a doubling of the stormwater utility fee from $140 to $280 under consideration by City Council. The increase would happen in two phases: an increase from the current $140 per billing unit to $210 in June 2021 and increase to $280 in November 2021. City Council will have a second reading, public hearing and final consideration on Feb. 20.

Jinks did not propose other tax or user fee increases including for the solid waste or sanitary sewer rates.

The proposed budget factors in a $3.3 million increase in city operations, or 0.9 percent increase. According to a city statement, the proposed funding provides funding for initiatives supporting the city's goal of equity for all, supports small businesses and affordable housing, bolsters civic engagement efforts, supports community-based policing, increases availability and quality of early childhood education programs, creates a policing-behavioral health co-responding pilot program, and provides funding for capacity and system maintenance of stormwater management. The budget would also create a position to focus on city language policy and practices, transition the Yard Waste Collection Program to a fully in-house operation, fund flood mitigation, replace outdated criminal and civil justice system software, restore Holmes Run Trail, enhance cleaning and maintenance of the waterfront parks; and add a virtual collaboration engineer to expand virtual meeting capabilities.

The proposed budget calls for $239 million in operating funds for the Alexandria City Public Schools, a $5 million increase over the current fiscal year budget. The city's CIP includes $551.5 million, or 100 percent of the school board’s adopted 10-year Capital Improvement Plan.

In a note to City Council and the community, Jinks said the challenge of the fiscal year 2022 budget was to "build back — cautiously and responsibly— during the extreme uncertainty of how severely, and for how long, the pandemic would affect City revenues." The fiscal year 2021 budget had budget cuts due to the COVID-19 pandemic's impact on the city revenues, and the real estate tax rate stayed the same. A real estate tax increase had been proposed in fiscal year 2021 to fund capital projects, but that increase was withdrawn with a revised proposal to account for the pandemic.

The city manager noted that fiscal year 2022 revenue is expected to increase by 1.9 percent over the current year's budget, largely due to increasing real estate values. The city expects revenues from hotel occupancy, restaurant meals, interest earnings, parking related revenues and car taxes all projected to continue to underperform due to the pandemic. Although the pandemic could be forecast to end in 2021, the city will expect a negative economic impact for several years.

Jinks will virtually present his proposed budget to the public on Feb. 18 at 7 p.m. City Council will hold nine work sessions in the spring on the proposed budget, hold a budget public hearing on March 8, tax rate and preliminary add/delete public hearings on April 27 and budget adoption on May 5. Public comments may be submitted online or during the budget presentation and public hearings.

More information on the proposed budget is available at alexandriava.gov/Budget.