4-Cent Increase To Real Estate Tax Rate In FY 2025 Budget Proposal

FAIRFAX COUNTY, VA — Fairfax County Executive Bryan Hill submitted to the Board of Supervisors Tuesday the Fiscal Year 2025 Budget proposal, which called for a 4-cent increase to the real estate rate. This would raise the average household tax bill by $524 next year if the new rate was adopted.

By increasing the residential real estate tax rate by 1 penny, the county can expect $32.32 million in revenue in FY 2025 from residential real estate taxes.

The board of supervisors will announce an advertised tax rate for FY 2025 on March 5. This will be the highest tax rate that the supervisors will be able to adopt, when they vote on the final budget on May 7.

Hill told the supervisors that the county faced a $284.5 million shortfall in FY 2025 caused by a flattening of the real estate market, global impacts on the local economy, and pending collective bargaining agreements. The budget proposal also takes into account the ongoing effort to increase pay and benefits for county employees and support for Metro.

The commercial/industrial percentage of the total of real estate assessment base decreased from 16.16 percent in FY 2024 to 15.58 percent in FY 2025.

Board Chair Jeff McKay stressed at the beginning of the Tuesday's presentation that this was the first step in a long process that would lead to the supervisors adopting a final budget on May 7. The board is required to adopt a balanced budget.

The FY 2025 budget proposal presented on Tuesday included $180.5 million for county employee pay and benefits. These included:

• $37.5 million increase - police bargaining unit
• $23.7 million - fire and emergency services bargaining unit
• $48.4 million- market-rate adjustment for non-representated employees
• $17.9 million - performance and longevity increases

Hill's budget proposal included $166.1 million toward the Fairfax County Public Schools' operating transfer request included in Superintendent Michelle Reid's proposed budget. This a $254.03 million or 10.5 percent increase over the FY 2024 budget.

Reid's budget request is the largest increase in school funding since FY 2007, according to Hill's budget proposal. The increase comes in the aftermath of a JLARC study that reported Virginia schools received 14 percent less in funding per pupil than the average for the entire U.S.

The proposed budget for FCPS includes:

• $42.2 million in increased state revenue
• 6 percent compensation adjustment for all employees effective July 1, 2024
• Baseline funding for the 2 percent compensation adjustment implemented by FCPS effective Jan. 1, 2024.
• A new 5-year Deferred Retirement Option Program for legacy employees, who are on the Educational Employees' Supplementary Retirement System
• Over $46 million in funding to address student demographic changes and enrollment growth.

School Board Member Kyle McDaniel praised the inclusion of an additional $165 million for FCPS.

"I want to express my gratitude to the Board of Supervisors and the County Executive for their commitment to supporting public education," he said. "I look forward to working together with them to meet the needs of our schools, staff, and families.”

Hill's budget proposal also includes $16 million in funding toward Metro operations. Added to an increase in state funding and gas tax receipts, Metro will see a nearly $37 million increase in its funding in FY 2025. Fairfax Connector will also see an inflationary increase of $2.15 million toward its operating expenses.

In the coming days, each of the supervisors will be announcing public hearings in their districts focusing on the FY 2025 budget.

The following is the timeline for public input and the adoption of the Fairfax County FY 2025 Budget:

• Nov. 28, 2023: Joint County/School Budget Committee to discuss FY 2025 fiscal forecast
• Jan. 25, 2024: FCPS Superintendent releases FY 2025 Proposed Budget
• Feb. 5: School Board holds public hearings on budget
• Feb. 20: County Executive releases FY 2025 Advertised Budget Plan
• Feb. 22: School Board adopts FY 2025 (proposed) Budget Plan
• Feb. 27: Joint County/School Budget Committee to discuss FY 2025 budget and tax rate
• March 5: Board of Supervisors Advertises FY 2025 tax rate
• March 19: Board of Supervisors Advertises FY 2024 Third Quarter Review
• April 16: School Board Presents FCPS Budget to Board of Supervisors
• April 16-18: Board of Supervisors holds public hearings on FY 2025 Budget
• April 30: Board of Supervisors marks-up FY 2025 Budget
• May 7: Board of Supervisors adopts FY 2025 Budget
• May 23: School Board adopts FY 2025 Approved Budget
• July 1: FY 2025 Budget Year begins