Fairfax City Manager Dan Alexander and Chief Financial Officer JC Martinez fielded questions from residents at City Hall and via Zoom during a public feedback session on the FY 2027 budget. (Michael O'Connell/Patch)
FAIRFAX CITY, VA — The Fairfax City Council is scheduled to vote Tuesday, May 5, on a series of tax and utility rate resolutions as part of the final adoption of the fiscal year 2027 budget.
The meeting, which includes public hearings on the proposed rates, will conclude an annual budget process that began in February. According to a staff memorandum from City Manager Daniel C. Alexander and Chief Financial Officer Juan C. Martinez, the council will consider motions to set tax rates for real estate, personal property, and several specific business and consumer categories.
The council will vote to set the real estate tax rate at $1.0725 per $100 of assessed value, effective Jan. 1, 2026. This represents a adjustment from the city manager's originally proposed $1.080 rate.
Under the proposed tax rate of $1.0725 per $100 of assessed value, the average residential tax bill is projected to increase compared to the previous fiscal year.
Comparison Of Average Tax Bills
While the specific dollar difference between the FY 2026 and proposed FY 2027 bills for an average home is not explicitly stated in the provided reports, the following data context describes the recent trend:
Current FY 2026 Average Bill: The average residential tax bill under the current $1.055 rate was estimated to increase by $335 per household over the previous year.
Proposed FY 2027 Bill: With a proposed rate of $1.0725 and a 2026 average assessment of $726,287, the new bill would be $7,789.43.
Total Percentage Increase: The city anticipated that the average residential tax bill would increase by 6.31 percent as part of the FY 2026 budget adoption.
Factors Driving The Change
Rate Increase: The proposed $1.0725 rate is a $0.0175 (1.75 cent) increase over the current $1.055 rate.
Assessment Increases: Most of the increase in tax bills is driven by rising property values; for 2025, residential assessments rose an average of 4.58 percent
Equalization Gap: To have kept the average homeowner's bill exactly the same as the prior year (the "equalization rate"), the council would have needed to set a rate of $1.0088 which is $0.0637 lower than the proposed rate.
The personal property tax rate is proposed to remain at $4.13 per $100 of assessed valuation. A reduced rate of $0.01 per $100 is proposed for qualifying volunteer fire department or rescue squad members.
Commercial And Industrial Property
A separate real estate tax on commercial and industrial property is slated for re-adoption at a rate of $0.125 per $100 of assessed valuation. Under Virginia law, these revenues must be used "exclusively for transportation purposes that benefit the City of Fairfax." Staff reports indicate the tax is expected to generate approximately $2.6 million.
Consumer And Business Taxes
Several proposed ordinances would increase taxes on meals, lodging, and business licenses:
Meals Tax: The city currently imposes a 4.0 percent tax on prepared meals. The proposed ordinance would increase this to 4.5 percent, effective July 1, 2026. According to city staff, this 0.5 percent increase would generate an additional $1.3 million and "reduces the financial burden on residents" by shifting costs to visitors.
Transient Occupancy Tax (TOT): This tax on hotel room rentals would increase from 4.0 percent to 10.5 percent. The 6.5 percent hike is projected to generate $812,500 in additional annual revenue.
Business Professional and Occupational License (BPOL): For the first time in more than 30 years, the city is considering an increase to BPOL rates. The rate for professional, financial, and real estate services would rise from $0.40 to $0.45 per $100 of gross receipts. The rate for repair, personal, and business services would increase from $0.27 to $0.30 per $100.
Utility Rate Increases
Wastewater and stormwater rates are also subject to increases to fund infrastructure needs:
Wastewater: A 6.0 percent rate increase is proposed for FY 2027 to cover costs related to aging infrastructure and upgrades at the Noman M. Cole Wastewater Treatment Plant. For residential customers, the base quarterly rate for the first 5,000 gallons or less per quarter would be $72.45 and per 1,000 gallons for all water in excess of 5,000 gallons $13.85. The increased user fees are expected to increase Wasterwater Utility revenues by $625,670. For an average residential customer who typically uses 14,000 gallons per quarter will see a $11.16 increase in wastewater fees.
Stormwater: The council will consider a 5.0 increase to the stormwater utility fee, setting the rate at $36.02 per billing unit.
Public Participation
The City Council will hold public hearings on these items during the Tuesday meeting at City Hall. Members of the public can participate in the following ways:
In-Person: Residents may speak during the public hearing at City Hall, Council Chambers (Room 100).
Email: Comments can be sent to publichearing@fairfaxva.gov. Emails should include the agenda item in the subject line along with the sender's full name and address.
eComment: Residents can submit digital comments through the city's website.
The proposed FY 2027 budget describes the city's goals and activities for the fiscal year beginning July 1, 2026. Detailed budget documents and supporting memos are available on the city's official budget page at fairfaxva.gov/Government/Finance/Budget.