There’s good news and bad news in Fairfax City’s FY 26 budget, adopted May 6, along with the City’s CIP (Capital Improvement Program) for FY 2026-2030. The residential real-estate tax rate didn’t rise as much as it could have, and the meals tax remained the same. But City employees are getting smaller pay increases, and money for a popular home-improvement program was cut altogether.
When Acting City Manager Bryan Foster presented his FY 26 budget recommendations in February, he proposed a residential real-estate tax hike of 9.5 cents – increasing this rate from its current $1.03 per $100 assessed valuation to $1.125. Instead, City Council and staff worked to reduce the tax-rate increase to just 2.5 cents, approving the FY 26 rate of $1.055.
Adding in homeowners’ rises in the assessed value of their homes, it means an average increase of $959 per household. And the stormwater and wastewater rates each increased by 6 percent, as well, to support Fairfax’s utility infrastructure and services.
Foster also advised the City to hike its meals tax from 4 to 6 percent – an idea that proved deeply unpopular with both residents and restaurant owners. They emailed Councilmembers about it and spoke up at meetings.
Indeed, at the April 22 public hearing, the owners of Hamrocks, P.J. Skidoos, Dolce Vita, Patriots Pub & Grill and Mackenzie’s Tunes & Tonics told Council how raising the meals tax would hurt their businesses by increasing the prices their customers would pay. And Jennifer Rose, executive director of the Central Fairfax Chamber of Commerce, said it would also be detrimental to the City’s small businesses and economic development. Ultimately, the new budget keeps the meals tax at 4 percent.
Foster had also recommended giving the City’s usual, 3.5-percent merit-pay increase to eligible, general pay-scale employees. But in its adopted budget, Council cut it to just 2 percent.
It also slashed $392,000 from its budget by canceling the City’s usual allocation to one of its own programs intended to help City residents repair their aging homes. In conjunction with its banking partner, MainStreet Bank, the City of Fairfax Renaissance Housing Corp. (FRHC) provides two-year, no-interest, home-improvement loans to qualifying homeowners. But this budget contains no money for it.
Overall, the total approved budget for all City funds – General, Capital Projects, Old Town Service District, Transportation Tax, Cable, Wastewater, Stormwater Utility, Transit and American Rescue Plan Act (ARPA) – is $290.2 million, a 10-percent jump from FY 2025.
The General Fund budget is $198.6 million – a 9.9-percent increase over the current fiscal year. It maintains the City’s 17.7-percent unassigned General Fund balance and helps support the City’s AAA bond rating. In addition, the City’s school-tuition contract is fully funded at $71.4 million, marking an increase of 21.4 percent, or $12.6 million, from the previous year.
The FY 26 budget fully funds 126 of the 130 projects in the CIP, to the tune of $98.1 million in FY 26 and $614.9 million in FY 26-30. It also allocates $9.6 million to Parks and Recreation plus $31.9 million to Transportation. And it adds $200,000 for an efficiency audit.
However, to keep the real-estate tax rate from rising more than 2.5 cents, several expenditure reductions had to be made. They included $400,000 for travel and training, $100,000 for nonprofit grants, and $1 million for filling non-urgent staff vacancies.
And while it’s tough to please everyone, Foster believes the City did the best it could. “This budget invests in the future of our community, and I commend City Council and staff for their dedication in finalizing a plan that reflects those priorities,” he said. “While future years will present fiscal challenges due to constrained resources, we remain committed to maintaining financial balance and continuing to deliver the high-quality services and programs our community depends on.”