Up To 4-Cent Real Estate Tax Increase Considered In Alexandria

ALEXANDRIA, VA — Alexandria City Council set an advertised real estate tax rate 4 cents above the current rate as budget discussions continue.

The advertised tax rate is the highest rate City Council can adopt during this year's city budget process. Vice Mayor Amy Jackson made the motion to consider up to a 4-cent tax hate hike, which would increase the rate up to $1.15 per $100 of assessed value. There was no proposed change to the $5.33 per $100 of assessed value personal property tax rate on vehicles.

City Manager James Parajon had proposed a budget that would keep the existing real estate tax rate — $1.11 per $100 of assessed value. An alternative budget with the proposal included a 1-cent increase.

"I don't want anyone to take a conclusion as advertising a particular rate as a commitment on the part of Council to a particular funding target, because there are still many months ahead of us here for Council to go through this process and determine what we will ultimately budget and what are the highest priorities," said Mayor Justin Wilson at Tuesday's meeting. "And again, I would always caution us that the loudest voices are rarely indicative of the most significant needs."

The advertised tax rate decision came after council members discussed funding needs and how much of a tax increase should be considered.

Jackson noted while the advertised tax rate is not approved now, City Council has heard concerns about funding needs.

"We were packed here last night listening to a public hearing for two and a half hours about affordable housing issues, about school issues," said Jackson. "We have a lot that our city is challenged with right now."

Councilmember Canek Aguirre initially offered a substitute motion to consider up to a 6-cent real estate tax increase but later seconded the motion for the 4-cent increase.

"We have not been able to find new revenue. We are 20,000 residents larger with a staff that is at the same levels from 2010," said Aguirre. "We have to pay for services. Our schools are asking for more money. You know, we still have a collective bargaining agreement to go with general Service staff that we have here at the city. We have our own infrastructure buildings for the city that we need to pay for. When we are looking at DASH [bus system] we're looking to expand service not to reduce service."

Aguirre added even if City Council doesn't pursue a 6-cent increase, budgetary pressures might require an increase next year.

According to city staff, the average tax bill would increase by $210 under the current tax rate due to appreciating property values. A 6-cent hike would increase the bill by $420.

Other members were hesitant to support a 6-cent advertised tax rate.

Councilmember Alyia Gaskins cautioned council members against proposing a high enough advertised rate that would encourage residents to propose funding ideas that wouldn't be seriously considered.

"I'd like to find a way that we are bold and set something high enough that does not constrain us but we can have those conversations but also just not set up a situation where in the end, folks come back and say I don't feel this was a good process," said Gaskins.

Councilmember John Taylor Chapman preferred a smaller tax ceiling than a 6-cent increase, noting that the city will have to consider how to fill even bigger budget gaps in future years.

"So looking closer to something around 3, 4 or 4 and a half [cents] is a ceiling that I think not only wakes people up, but also reminds people that we're not going to be able to do everything," said Chapman. "Because I think even with that as a ceiling, if you calculate out some of the DASH challenges, some of the affordable housing conversations, some of the school conversations and our own kind of budget gaps, you pour those in a pot, you still won't have enough that a 4, 4 and a half-cent increase might get you."

Councilmember Sarah Bagley agreed that a 6-cent increase might not be realistically be what City Council may approve, noting a tax burden concern.

"My concern is in any given year to experience that amount of bump for particularly for those individuals, we have an aging community, we have people on fixed incomes and we have people on the other end more like my end, a single income homeowner in a relatively small space for whom significant jumps in taxes might really matter too much in my budget and my bottom line, and I'm alone in that," said Bagley.

The mayor requested the city manager and staff provide insight into what additional funding from a real estate tax increase up to 4 cents could go toward. The city manager's alternative 1-cent proposal outlines how additional funding would be used with the additional 1 cent on the tax rate.

City Council held a budget public hearing on Monday, and the next is set for Saturday, March 16. A budget add/delete public hearing is set for April 13, and tax rate public hearing is set for April 24. The final add/delete decisions for the budget will be on April 29, and budget adoption is expected on May 1.

For more information on the budget and timeline, visit www.alexandriava.gov/Budget.