While the City Manager’s proposed budget included no tax rate increase, the average real estate tax bill in Alexandria will go up by $353 this year and there was a lot of nervous talk about the region’s future.
City Manager James Parajon presented a budget to the City Council last night defined mostly by budget reductions and a wary eye toward the future of the region given the turmoil in the federal government.
The budget proposal included $956.5 million for the general fund operating budget and $2.08 billion for the 10-year Capital Improvement Plan (CIP).
The budget noted that, even with no tax rate increase, the climb in average assessed value across the city meant taxpayers could expect their bills to climb this year.
- The average single-family home was assessed at $1 million, with an average tax bill increase of $443.
- The average condominium was assessed at $447,612, with an average tax bill increase of $271.
- Overall, the average assessed value is $729,925, with the average tax bill increase at $353.
There is also no proposed change to the sanitary sewer or refuse rates, though stormwater utility fee rates will climb from $324.10 to $349.30.
Parajon said a focus on the budget was using funds to offset potential losses for programs that rely on federal grants, many of which are in jeopardy.
“What happens at the federal level definitely affects the City of Alexandria,” Parajon said. “While there are some new things in this budget, a lot of what we’re doing is continuing to build on the progress we’ve made in past years.”
Parajon said the budget included $6.4 million in general fund expenditure reductions, part of a trend in recent years with $32 million in cuts to city departments over the last five years.
Parajon said seven positions, currently vacant, would be cut while the city would be funding nine new positions for a net increase in two new full time employees — including another noise inspector. This drew some nods from City Council members: city zoning disputes frequently involves noise complaints, making the city’s relatively small number of noise inspectors some of the most overworked city employees.
Must of the discussion of the city’s budget focused on uncertainty about the region’s future, with the culling of federal employees creating a mood similar to the 2020 budget season when the Covid pandemic was in full swing. Alexandria has relatively low unemployment — 2.2% in December compared to 2.8% for the region and the national rate of 4.1%, that was obviously before cuts to the federal workforce — but Parajon said the city is bracing for hard times ahead.
“Obviously our national and local economy are changing pretty dramatically as we sit here today,” Parajon said. “Uncertainty is a word you’ll hear over and over again tonight. Without a timeframe for when these actions take place, it’s hard to be certain when we’re going to respond to those.”
Parajon also noted that federal trade policy could play a role in the city’s CIP.
“The CIP has a lot of steel and lumber embedded in them and those cost structures based on a set of circumstances that may be changing in 2025 and beyond,” Parajon said.
The budget also included an increase of $8.2 million (3%) in funds transferred to Alexandria City Public Schools’ (ACPS) operating budget and $21 million to ACPS capital funding — though pushing back on ACPS’ plans to convert the city’s two K-8 schools into an elementary and middle school. Parajon said funding to ACPS has been increasing “at a greater rate than other city services.”
Parajon said the School Board’s request for even more capital funding — to the tune of $57 million — was “unsustainable” and would have required either an additional $7 million in city reductions beyond the current $6 million in cuts or an increase to the tax rate by 1.5 cents.
The budget also includes $40 million to support waterfront flood mitigation.
Looking ahead, Parajon expressed some concerns about challenges in the FY 2027 budget.
“We face additional federal funding uncertainty, [along with] national and regional economic uncertainty,” Parajon said. “[But] this is an incredibly positive, forward-thinking community that can manage through any situation.”
