Alexandria Budget Proposed Amid Uncertainty From Federal Worker Reduction

ALEXANDRIA, VA — The new City of Alexandria budget proposed by City Manager James Parajon Tuesday night includes the same real estate tax rate, but appreciating property values could still result in higher tax bills.

The city's fiscal year 2026 operating budget proposal totals $956.5 million, a 3.2 percent increase from the $926.4 million in the last budget. The city was facing an $18 million budget gap due to increased spending and moderate revenue growth. The budget factored in $6.4 million in efficiency savings, but collective bargaining, funding requests from Alexandria City Public Schools, and city and schools debt service obligations contribute to the increased spending for the city government.

The city government said the budget acknowledges uncertainty from federal actions on reducing the federal workforce and immigration enforcement. The city has an estimated 13,000 federal workers.

"The proposed budget takes a fiscally cautious approach, reflective of uncertainty due to federal administration changes and how those changes can impact our residents and businesses," Parajon said in his budget message.

Alexandria's real estate rate would remain $1.135 per $100 of assessed value. But property owners who saw their assessment values increase should expect a higher tax bill under the same real estate tax rate. The average residential real estate tax bill would increase from $7,931 to $8,285 annually.

This year, the overall residential tax base increased by 4.55 percent, or $1.4 billion. The average single-family home value is $1,001,336, up 4.06 percent from $962,276 in 2024. Condominium values average $447,612, up 5.63 percent from $423,765 in 2024.

The budget proposal continues planned increases to the stormwater utility fee, which are supporting accelerated stormwater capacity project to address flooding. The city has experienced flash flooding in neighborhoods where the stormwater infrastructure cannot handle heavy rainfall in a short amount of time. In the proposed budget, the stormwater utility fee would increase from $324.10 to $349.30.

There is no proposed change to the vehicle personal property tax rate of $5.33 per $100 of assessed value.

On the personnel side, the budget funds collective bargaining commitments for fire, police, and the labor and trades bargaining units. A 1 percent pay scale adjustment is proposed for non-bargaining unit city employees.

The budget proposes $281.2 million in operating funds for Alexandria City Public Schools, which would be an $8.2 million, or a 3 percent increase. That will help support a 1 percent pay scale adjustment for ACPS staff in the school district's budget.

Other budget priorities include increased funding to DASH to support collective bargaining and inflationary impacts, an in-house pharmacy for the Alexandria Fire Department, funding for the city's cable TV franchise renewal, increased funding for Neighborhood Health, purchases of electric leaf blowers, support for Alexandria's participation in Sail 250 Virginia in 2026, a business accelerator pilot program run by the Alexandria Economic Development Partnership, expanded curbside composting service and glass recycling locations, funding for early childhood support and intervention projects, funding for Alexandria Recovery Court in the scope of Alexandria Circuit Court judges, and support for community-based food hub operations.

"In crafting this year’s budget, we built on the progress made over previous years by making investments that residents can feel improve their lives," said Parajon in a statement. "When they see the investments into our schools and youth programs, our infrastructure, the funding to support diversifying our housing options, and our funding commitment to pursue impactful economic growth, they know their City leaders are building on our progress towards a thriving future."

Parajon also presented a 10-year capital improvement plan update. The 10-year capital plan totals $2.08 billion and is a $324.5 million decrease from last year's capital budget. Among the projects funded in the plan are Alexandria City Public Schools projects, the Waterfront Flood Mitigation Project, the city's contribution to Metro, renovations of City Hall, Market Square and the parking garage, street reconstruction and resurfacing for 50 to 55 lane miles in fiscal year 2026, multimodal upgrades for the South Van Dorn Bridges project, DASH Bus fleet replacement, and the Old Town Pool renovation project.

The full budget proposal is available at www.alexandriava.gov/Budget.

The budget schedule will be:

• Wednesday, Febr. 26 - Budget Work Session #1 -City Capital Improvement Program
• Thursday, Febr. 27 - Public Presentation of FY 2026 Proposed Budget
• Wednesday, March 5 - Budget Work Session #2- City Council/School Board
• Monday, March 10 - City Council Public Hearing: FY 2026 Budget
• Tuesday, March 11 - FY 2026 Budget Set Maximum Tax Rate
• Wednesday, March 12 - Budget Work Session #3
• Saturday, March 15 - City Council Public Hearing Meeting - FY 2026 Budget Public Hearing (9:30 a.m.)
• Monday, March 17 - Budget Work Session #4
• Wednesday, March 26 - Budget Work Session #5
• Tuesday, April 8 - City Council Public Hearing Meeting - FY 2026 Budget Tax Rate Public Hearing (5:30 p.m.) followed by FY 2026 Budget Add Delete Public Hearing Meeting (6 p.m.)
• Tuesday, April 22 - FY 2026 Budget: Non-Real-Estate Tax Public Hearing (6:30 p.m.) followed by Budget Work Session #6-Preliminary Add/Delete (7 p.m.)
• Monday, April 28 - Budget Work Session #7-Final Add/Delete (if needed)
• Wednesday, April 30 - FY 2026 Budget Adoption/Tax Rate Adoption (6 p.m.)
• Tuesday, July 1 - Start of Fiscal Year 2026