Homeowners across Alexandria will be receiving their annual Valentine from City Hall this week, an assessment of their property that will be used to issue a tax bill later this year. The annual ritual of mailing assessments is the beginning of the budget cycle, which will conclude in May when the Alexandria City Council sets a tax rate. Residential properties increased 4.8 percent, and commercial properties increased 1.98 percent. Currently, the tax rate is $1.038 for every $100 of assessed value.
"Growing is good, and beating the rate of inflation is extra good," said Frank Shafroth, director of the Center for State and Local Government Leadership. "So I think all of those are positive signs."
Last year, property assessments grew 2.8 percent. Despite that increase, members of the Alexandria City Council added 4 cents to the tax rate — the largest tax-rate increase in recent memory. The tax hike, which was unanimously approved by the all-Democratic members of the council, increased the average residential property tax bill by more than $300. Council members explained that they were approving higher taxes to balance the books without cutting services.
"That is not something that any of us on this dais are certainly proud of," said Mayor Bill Euille. "But we worked within the parameters that we are dealing with."
RISING TAXES have been a growing concern in Alexandria in recent years. Now, in the wake of the global financial crisis, many are arguing restraint. Back in 2009, when the all-Democratic members of the City Council raised taxes, Republicans were able to seize the moment and unseat two Democrats. Now some believe the time might be right for another challenge, although the next election won't be until 2015.
"It was a shrewd political move raising taxes so far away from an election," said Frank Fannon, a former Republican council member. "I would hope the City Council members will see this as an opportunity to lower taxes."
This year, according to city financial records, Alexandria is adding more than $1 billion to its tax base. Most of the growth was in the residential properties, especially multi-family residential units. The commercial property sector is a bit more sluggish, growing at only 2 percent.
"The market for large commercial property owners used to be dominated by federal contractors," said Shafroth. "So if you're a federal contractor, you're probably not thinking about expanding right now. You're thinking there's a risk of another shutdown."
THE ASSESSMENTS show a city in transition. One of the largest decreases, for example, was the category of property owned by public-service corporations. That's because the coal-fired power plant owned by GenOn has now been reclassified, a victory for a city that fought to close the polluting property for many years. Another development that changed some of the numbers was the sale of Hunting Pointe Apartments, which had been owned by the Virginia Department of Transportation during construction of the Woodrow Wilson Bridge. Now that it's been sold, the waterfront land is no longer tax exempt.
"Unimproved land remains a scarce commodity in the city of Alexandria," Young concluded. "There has been activity in apartment land with several significant land sales. Of particular interest are a number of multifamily land transfers and a few in-fill residential lot sales."