Fairfax County Approves Meals Tax, Lowers Property Tax Rate
Local government diversifies revenue sources while addressing budget priorities
The Fairfax County Board of Supervisors has approved a budget markup that includes a new 4 percent meals tax and a slight reduction in the real estate tax rate. Board Chairman Jeff McKay, a Democrat, stated the budget reflects fiscal discipline while investing in community priorities. The meals tax, which would take effect January 2026, aims to diversify county revenue and reduce reliance on property taxes.
Property owners will see the real estate tax rate decrease by a quarter cent to $1.1225 per $100 of assessed value, rather than facing the 1.5-cent increase initially proposed. The board also approved increasing the transient occupancy tax from 4 to 6 percent for short-term accommodations. These revenue adjustments aim to limit the average property tax bill increase to $499, significantly less than the $638 increase in the originally advertised budget.
KEY POINTS
- •New 4% meals tax approved
- •Property tax rate slightly reduced
- •School funding increased by $118.6M
The budget restores several previously proposed cuts, including funding for middle school after-school programs and maintaining crossing guards at high schools through fiscal year 2026. Other restorations include transition services for students with developmental disabilities, maintaining current ambulance operations at multiple stations, and continuing park maintenance services. The budget fully funds county employee compensation plans and police and fire collective bargaining agreements.
Fairfax County Public Schools will receive a $118.6 million increase in county funding, matching the county executive's proposal but falling short of the school board's $268.3 million request. The budget also allocates $42.44 million for affordable housing, equivalent to 1.25 cents of the real estate tax rate, with plans to increase this allocation to 2 cents by fiscal year 2027. Additionally, the board set aside $12 million in reserves to prepare for potential federal workforce reductions and other economic uncertainties.
The budget markup represents the final step before the budget's formal approval, scheduled for May 13. County officials noted that the budget typically remains unchanged between markup and final approval. The meals tax is expected to transfer some of the cost of maintaining county programs to tourists, visitors, and commuters, with an estimated one-third of the tax receipts coming from non-county residents.