Draft county budget would cut real estate tax rate
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| The Fairfax County Government Center |
Fairfax County Executive Bryan Hill is proposing a 1-cent decrease in the residential real estate tax for fiscal year 2022.
That would help offset a big increase in real estate value over the past year, Hill told the Board of Supervisors in his presentation on an advertised budget Feb. 23.
Even with that decrease, the average annual homeowner would see a $224 (4.25 percent) increase in their tax bill, based on equalization changes. Residential real estate increased in value due to record low interest rates and low inventory.
Real estate
The average price of homes sold in 2020 was up 8.4 percent. Among the 344,000 residential properties in Fairfax County, 88 percent increased in assessed value, while 4.4 percent saw a decrease.
In Mason District, the average assessment is up 5.13 percent.
Board of Supervisors Chair Jeffrey McKay noted that smaller, affordable homes with the least value saw the biggest increases. And those homeowners tend to face the biggest economic struggles during the pandemic.
Nonresidential equalization – which includes multifamily housing, as well as office buildings and industrial uses – decreased 4 percent.
At the end of 2020, office vacancy rates were 14.6 percent, up from 13.9 percent at the end of 2019. That was due to the pandemic as more people worked at home, and companies put leasing decisions on hold.
Office vacancy rates in Fairfax County continue to increase, reaching 18.5 million square feet. Mason Supervisor Penny Gross suggested the county increase its focus on repurposing vacant office buildings for other uses.
Schools transfer
Hill’s budget proposes a $14.13 million increase in funds transferred to Fairfax County Public Schools, which is far short of the $104.4 million requested by the school board.
The school board is proposing a 3 percent increase in compensation for teachers, and “we simply do not have the resources available.”
McKay said that when the state approves a pay raise for teachers, local governments are expected to fund the majority of that increase. A 3 percent pay raise would cost the county $60 million.
Employee compensation
Based on limited resources, Hill’s budget proposal does not include a compensation increase for county employees.
“I know this will not be well-received,” Hill said, noting that people will question why the budget cuts taxes and doesn’t increase employee pay.
He said that the county expanded family leave, sick leave, and administrative leave during the pandemic, and the board approved a $2,000 hazard pay bonus two weeks ago.
Expenses
The budget proposes 109 new staff positions, mostly for new facilities and workload increases.
The new positions would support a new South County Police Station, the Office of the Commonwealth’s Attorney (15 positions), the Scotts Run Fire Station, increased capacity for the 911 emergency system, additional public health nurses for schools, the opioid task force, environmental projects, and increased services for vulnerable residents.
The budget also includes nearly $1 million for six new positions to implement collective bargaining.
Several supervisors questioned why the budget would greatly expand the Commonwealth’s Attorney’s Office but not provide more funding for public defenders.
The proposed budget calls for a new recurring reserve fund of $20 million. That would be separate from the one-time Economic Opportunity Reserve Fund.
Economic trends
The unemployment rate in Fairfax County was 4.4 percent in December 2020, much higher than the 1.9 percent rate in December 2019, but lower than the high of 10.2 percent last April.
There is still significant uncertainty on revenue. Hill said, so his budget assumes a conservative 1.5 percent growth in revenue.
The hotel and retail sectors were especially hard hit, although sales tax revenue is up 2.5 percent mostly due to internet sales.
Related story: School board adopts FY22 advertised budget focusing on pandemic recovery
Fairfax County received over $200 million from the federal CARES last year for COVID relief. Those funds were used for public health, assistance to the most vulnerable residents, and direct support to small businesses and nonprofits hurt by the pandemic.
Considering many of us that are lucky enough to continue to be employed are dealing with wage freezes or furloughs that cut our pay, this at least is a LOT more reasonable of a budget than what FCPS proposed.
I still think the county should in general re-visit collective bargaining in a year. Right there is an an expense that introduces new costs as well as potential cost and service uncertainty in an already incredibly volatile situation with the pandemic. The supervisors and board reps don't need to say "no" – just "not yet".
What you have to "love" about our board is that when real estate prices don't rise very much, they increase the tax rate. When it does rise a lot, they decrease it by a penny, thus assuring that we still have an "average" $224 increase (I always seem to be above average with my own tax increase). In either case, the budget continues to grow above inflation and the big spenders continue to spend.
I just got my assessment and was shocked at the number- higher than what Redfin/Zillow assess. This is just one big game.
Any recommendations for a good method or procedure to appeal that completely false Fairfax home value assessment?
They decided my house price went up 15%
That's rough. Mine and most in my neighborhood right by 7 corners is up 10% – largely driven by the prices homes are selling for these days.
I successfully challenged my assessment a number of years ago, but it was because I could show comparable sales were coming lower than what they had captured. As a rule of thumb, the assessed value should be roughly 8-10% lower than the sales price of recently sold (< 1 year) comparable homes – comparable homes meaning homes of similar square footage, bedroom and bathroom count.
Good luck.