City of Fairfax residents will see a drop in their real estate tax rate this year. At the City Council meeting Tuesday, March 14, the council unanimously approved a motion to advertise a 74-cent real estate tax rate for the 2006-2007 fiscal year, down from the current rate of 81 cents per $100 of assessed property value.
The advertised tax rate is the maximum tax rate that can be set when the council adopts their 2006-2007 budget on Tuesday, April 4. Total assessed real property values — not including new construction or improvements — have risen about 21 percent in the City of Fairfax since last year. To offset this increase and keep the amount of money homeowners actually pay the same as last year, the tax rate would have to be 71 cents per $100 of assessed value. Residents will still pay more on their property taxes this year, since the proposed advertised tax rate is a 5.4 percent increase from the 71-cent lowered rate.
With the 74-cent rate, said Mayor Rob Lederer, city residents pay the lowest property taxes in Northern Virginia. Last year, the city employed a split tax rate of 87 cents in the first half of the year and 81 cents in the second half for an average of 84 cents per $100 of assessed value. In 2004-2005, said city manager Bob Sisson, the property tax rate was 90 cents and in 2003-2004, it was 92 cents.
"I think this is such good news," said Lederer. The new rate will return 8.2 percent more general funds to the city’s budget than last year.
THE CITY HAS BEEN able to keep a low tax rate and make major investments at the same time, such as open space, downtown redevelopment, and road improvements, said Councilmember Scott Silverthorne.
"The bottom line is, we’re very proud of our tax rate," he said.
The advertised real estate tax rate is just part of the City of Fairfax’s 2006-2007 proposed budget, which Sisson presented at a work session later Tuesday evening. The budget lists expenditures for all funds at $119,118,568, which is an 8.7 percent increase from last year, with general fund expenditures and revenues balanced at $101,776,565. CUE Bus fare will increase from 50 cents to 75 cents, but personal property tax will stay the same, at $3.29 per $100. The meals tax, cigarette tax, and cellular tax are also unchanged.
The city's biggest expenditure is the general fund, at 82 percent of the budget, with water expenditures following at $10.8 million, 9 percent of the budget. The city spends nearly half its general fund, or $42.3 million, on education, with $10.9 million or 10 percent going to miscellaneous expenditures and another 10 percent, or $10.5 million, going to the City of Fairfax Police Department.
Fairfax receives 43 percent of its general fund revenue from the real estate tax ($43.1 million), with 12 percent ($12.7 million) from the sales tax, 10 percent ($10.3 million) from state aid, and 10 percent ($9.8 million) from the personal property tax.
This is a diverse mix of revenue sources, said Sisson. "It's nice to see that some of these other tax revenue sources are bringing in much-needed dollars and that we're not dependent on the real-property tax," he said.
THE COUNCIL ALSO unanimously approved an increase in the water and sewer service rate by 5 percent. This increase would help maintain balances in the water and sewer fund and allow capital improvement projects to meet anticipated expenditures, said Sisson. The increase would bring the rate to $117 per quarter and increase the fund revenues by about $306,000 for water and $201,000 for sewer. The city has the second lowest water and sewer rate in the area, said Sisson, but unlike other jurisdictions does not place surcharges during the peak summer season for water usage.
Applying surcharges rather than increasing the rates might be a better way to go, said Silverthorne.
"Would this be a more fair way to do this so that people who use more water during peak season will be penalized, rather than all the water users across the board?" he said.
The public hearing on the increase was set for the Tuesday, March 28 meeting.
Other items unanimously approved by the council included:
* Consideration of a resolution to extend the grace period on Flexible Spending Accounts.
* Consideration of a $200,000 contract award to EEC, Inc. for environmental remediation of the Old Town Village site. Most of the $200,000 will be reimbursed by State Department of Environmental Quality funds.
* An $1.8 million appropriation resolution for the Jermantown Road capital improvement project, which includes extending an additional lane southbound of Jermantown Road from the main entrance of the Giant Supermarket site to Route 50, widening parts of westbound Route 50, and widening along the east side of Jermantown Road where the Lanier Middle School project widening ends to the intersection with Orchard Street.