New Tax, Rate Changes In Fairfax County Board Of Supervisors' Revised Budget

FAIRFAX COUNTY, VA — There won't be a higher real estate tax rate in the final Fairfax County budget, but a new tax will provide the county with a new revenue source.

On Tuesday, the Fairfax County Board of Supervisors approved its budget markup, the last step before final budget approval on May 13. The budget typically remains unchanged between the budget markup and final approval. The budget includes a new meals tax for Fairfax County.

"Amid national economic uncertainty, we are staying grounded in transparency and fiscal discipline while investing in what matters most to our residents," said Board of Supervisors Chairman Jeff McKay (D-at large). "This budget reflects our commitment to listening to the community — we’re restoring key programs and services in direct response to resident feedback and taking meaningful steps to diversify our revenue, easing the burden on property owners while maintaining the high quality of services Fairfax County is known for."

A new 4 percent meals tax would be implemented with a budget approval. A county budget markup memo noted that officials did not seek action on a meals tax in years prior due to lingering impacts from the COVID-19 pandemic. The memo noted that the meals tax can help the county address overreliance on its real estate tax. The tax would go into effect on Jan. 1, 2026.

"It is estimated that a third of the Meals Tax receipts will be paid by those who live outside of Fairfax County, allowing us to transfer some of the cost of maintaining County programs to tourists, visitors, and those who commute into our County," the memo said.

Property owners won't see the 1.5-cent real estate tax rate increase that was proposed in County Executive Bryan Hill's proposed budget. Instead, the Board of Supervisors reduced the rate by a quarter cent from the current $1.125 per $100 of assessed value to $1.1225 per $100 of assessed value.

"While the Advertised budget sought to minimize, to the extent possible, the impact on taxpayers, the increase in the average Real Estate Tax bill was $638 – far higher than this Board can support," a budget markup memo said.

The memo notes that the board's rate would increase tax bills by an average $499.

The board is opting to increase the transient occupancy tax from 4 percent to 6 percent. This tax applies to short-term accommodations. According to the county, 1 point of the increase is targeted for tourism promotion. Visit Fairfax plans to develop a strategy for the tourism revenue and have a proposal in the fall.

Some proposed budget cuts have been restored under the board's budget markup. The board restored full funding for the middle school after-school program for the 2025–26 school year. In addition, crossing guards at high schools will remain through the 2026 fiscal year as the county explores staffing alternatives.

Other funding restorations include transition services through the Fairfax-Falls Church Community Services Board for students with developmental disabilities moving from K-12 to adulthood, maintaining current ambulance operations at Clifton, Crosspointe, Gunston, and North Point stations, and trail maintenance and mowing at parks.

Board of Supervisors office budgets will be kept at fiscal year 2025 levels, with pay increases absorbed into existing funding. The budget fully funds county employee compensation plans and the police and fire collective bargaining agreements. Amid economic uncertainty, the board allocated $12 million to reserves to weather possible federal workforce reductions and more fiscal impacts.

Overall, Fairfax County Public Schools is receiving a $118.6 million increase to its county funding. That was the amount proposed in the county executive's budget proposal but less than the $268.3 million increase requested by the Fairfax County School Board.

For affordable housing, the budget sets aside $42.44 million, or 1.25 cents of the real estate tax rate. The board is aiming to allocate two cents by fiscal year 2027 and may seek one-time funding sources for affordable housing proposals.

Temporary state funding is covering half of Virginia's Metro funding share, which kept Fairfax County's contribution flat. However, the county could face increased Metro costs in fiscal year 2027, as the state support may not run past the 2026 fiscal year.

County supervisors acknowledged challenges in the budget such as funding for schools, federal economic uncertainty and reliance on the real estate tax.

"We're so overly dependent on the real estate tax and we have a situation where the commercial real estate is flat in terms of revenue, no increase, and yet residential assessments have continued to go up," Supervisor Walter Alcorn (D-Hunter Mill) told Patch's Michael O'Connell on Sunday. "So, we have a residential real estate tax program we're trying to deal with, and, overall, we're trying to accommodate the schools and their requests and looking at making cuts across a number of county programs."

"We have a combination of underfunding of schools from Richmond, and, obviously, the uncertainty created by the Trump administration and the challenges in the commercial office markets that ave combined to make it a very tough budget this year," Supervisor James Walkinshaw (D-Braddock) told Patch.