Alexandria homeowners will see their property taxes rise an average of $314 in the coming fiscal year, the City Council unanimously decided Monday night.
The 4-cent increase in the tax rate — from 99.8 cents per $100 of assessed value to $1.038 cents per $100 — will boost the real estate taxes of a home valued at $470,644 (the city’s average) to $4,885 a year. Residential property assessments rose an average of 2.72 percent, which also contributes to a higher property tax bill.
Mayor William D. Euille (D) noted that the city’s property tax rate is the second lowest in Northern Virginia. Arlington County’s rate is $1.006.
Alexandria’s vehicle tax will also rise — to $5 per $100 of assessed value.
“Our city still faces financial challenges, and this budget — including the 4.0-cent increase in the tax rate — reflects the need to not only maintain our present but to build our future,” Euille said. Efforts to update the city’s infrastructure, from streets to schools, “have long been delayed and underfunded,” he said, and the fiscal 2014 budget starts to address those needs.
Council members described their decision to raise taxes as “difficult,” but they turned down many of the recommendations City Manager Rashad Young made two months ago for budget cuts. The council, made up of all Democrats, refused to cut money for library materials, kept Warwick Pool open for at least one more year, and funded a gang-prevention program and the sheriff department’s car-seat installation program.
“It’s a balancing act,” said Vice Mayor Allison Silberberg, who had pushed for more money for affordable housing and bicycle sharing as well as debt reduction. “We have to have pools. We have to have amenities. We have to have streets that are safe.”
Despite the prospect of a $31 million shortfall between revenue and expenses when deliberations began, other council members also pushed for favorite programs. Redella S. “Del” Pepper, for example, succeeded in finding money to keep the holiday lights in the trees along Old Town’s King Street for three more months, into June.
The $624.8 million operating fund budget rose $37 million, with $185.6 million for public schools, an increase of $6.1 million; $1 million to pay down debt; $6.97 million for capital improvement projects (funded from half of the 4-cent tax increase); and an additional $2.5 million for transit operations.
The separate capital-improvement budget foresees spending $1.23 billion over the next 10 years, with emphasis on schools that need more buildings because of booming enrollment, the expanding Chinquapin Aquatics Center, street repairs and the purchase of self-contained breathing apparatus needed by the fire department.
Council member Paul Smedberg warned his colleagues about the dangers of cutting funds for capital improvement in order to pay for ongoing operating costs of the government.
“We’re essentially tying the city manager’s hands moving forward by adding things back into the operating budget,” Smedberg said. “We need to look at becoming a leaner, more efficient operation, making strategic changes . . . even outside the budget process.”
Council members Justin Wilson and Tim Lovain, newly reelected to the council after losing their seats following a tax increase two election cycles ago, said another tax increase of this size is unlikely anytime soon.
“We made a very significant and lasting commitment to our capital infrastructure, and I’m particularly proud we didn’t take the easy way out,” Wilson said. “We have to be clear that this is a very large tax increase at a very difficult time. In the next year, we are looking at some very, very stark cuts.”
“We have a fundamental structural problem. Our revenues, based mostly on property taxes, are not keeping up with our spending,” he said. “I regret we have to raise taxes by four cents, but I don’t think we’re going to be able to keep doing that. We need economic development, especially commercial economic development.”