City Council Rules Out Real Estate Tax Rate Increase For Alexandria Budget

ALEXANDRIA, VA — In a 4-3 vote, Alexandria City Council narrowly approved a flat advertised real estate tax rate Tuesday, which means a higher rate cannot be adopted during this budget process.

Councilmember Kirk McPike made the motion to advertise a flat tax rate — the current $1.135 per $100 of assessed value. City Manager James Parajon proposed that same tax rate in his budget proposal.

Last year, City Council had raised the real estate tax rate by 2.5 cents. Even if the current rate stays the same, the city estimated that the average residential real estate tax bill would increase from $7,931 to $8,285 annually.

McPike's motion also called for advertising the same personal property tax rate, which is $5.33 per $100 of assessed value personal property tax rate on vehicles and $4.75 per $100 of assessed value rate on business personal property.

The advertised rate is not the final tax rate, but it is the maximum rate that City Council will adopt. The final tax rate will be adopted on April 30 along with the fiscal year 2026 budget. A public hearing on the tax rate is scheduled for April 8.

McPike called for the city to be "a source of stability and calm" as workers face job uncertainty with federal actions.

"The Trump administration represents a unique and severe threat to Alexandria and many of the people who live here and across our city," said McPike. Thousands of our residents are worried about their economic future, whether they'll have a job in a few months, whether they'll like the job that they have in a few months with new orders coming down from on high, whether they'll be able to afford to stay in this city and in the home that they're living in, and the foundations their lives feel unmoored and unreliable at this time."

When asked by McPike, Parajon explained why he did not propose an alternative budget with a higher proposed tax rate. The city manager pointed to uncertainty about the Trump administration's push for federal workforce reductions. An estimated 13,000 Alexandria residents who are federal workers and double that number for contractors.

"The second piece of that was concern over some recessionary indications towards the end of this calendar year, and then really the challenges that are facing our residents regarding inflation and some of the impacts on tariff actions and the fact that over the past year, the taxes have increased for many of our residents," said Parajon.

SEE ALSO:

• Alexandria Budget Proposed Amid Uncertainty From Federal Worker Reduction
• Average Single-Family Home Assessment Hits $1 Million In Alexandria

Parajon added, "I didn't feel like this was the time to raise the tax rate, but it does leave some needs on the table for council to consider in the future."

McPike praised the city manager and his staff for maintaining core government functions without proposing a real estate tax rate. He pointed to some other Northern Virginia localities considering tax increases due to budget deficits.

"The tax rate that we set, if it goes higher, that's more money that comes out of people's pockets from a job they may not have in six months, whether they own their home or they rent it, and that tax rate increase gets bundled into the rent that they pay each month," said McPike.

Other council members shared why they do or don't support a higher advertised rate.

Councilmember John Taylor Chapman, the longest-serving member on the active council, said he typically supports a higher advertised tax rate than the targeted rate.

"In the past, we have advertised a higher rate than the manager has come out with, but also messaged the fact that it is council's full intention not to go above what the manager has, but for making sure that we have, because we don't have a crystal ball...every tool in the toolbox as we are working through our budget, we have set, in the past, a slightly higher tax rate."

Mayor Alyia Gaskins countered that setting a higher advertised rate invites community dialogue on seeking additional funding items.

"I think it sets up a different type of conversation when we are in a space where we actually need to be pretty cautious and conservative," said Gaskins. "If [funding's] being set aside for risk planning or contingencies, but then all of a sudden, the community wants to commit it to many different programs that we'd only be able to do for one year, or only for a short time, I worry that that's not fair, and puts us in a more difficult situation in the following years when we wouldn't be able to continue some of those things."

Vice Mayor Sarah Bagley said residents are already vocalizing funding requests, such as a universal basic income program or doubling service on DASH Bus Line 32. Bagley encouraged residents to advocate for their requests, especially if the city comes into next year's budget with a better economic outlook.

"Regardless of an advertised addition, which I think in this year, very few of us are keen to do for all the reasons my colleague indicated, I want to assure the community that it doesn't foreclose the opportunity to continue to advocate for what might be possible," said Bagley.

Chapman said that may be an unfair expectation for the community.

"If we are going to embark down this road, I think we need to be very honest with the community," said Chapman. "If you come to us with something new, the expectation should be or there should be another discussion around, what would you cut? I don't think it's fair to the community to say, hey, what would you like to add, if we have no intention by advertising no additional tax rate, we have no intention of adding any type of new money."

Gaskins added, "I don't think what we said tonight limits us from having [conversations about funding increases]. I think it brings us to a community where we're going to have some really tough years ahead. Let's start having those conversations now, before we're forced to have them."

Councilmember Abdel Elboubi said a tax increase should be an option on the table, even if he believes raising taxes "should be the last option." He said City Council is early in the budget process and has only had two budget work sessions.

"To me, a tax increase should be the last resort after we go through the exercise of trying to find efficiencies and try to have these kinds of conversations with residents of what would you cut? Or what, if this is your priority, what else may take a back seat?"

Parajon presented his budget proposal on Feb. 25. Since then, City Council has held work sessions on the budget's capital improvement program, as well as a joint session with the Alexandria School Board on the school district's needs.

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

Other upcoming dates in the budget process are:

• 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