Falls Church revises FY26 revenue down $1.2M; council will advertise flat tax rate and study switching trash to a fee

Falls Church City officials told residents at a town hall that the city has revised its FY26 revenue forecast down by $1,200,000 and will advertise the current real estate tax rate of $1.21 per $100 of assessed value while the council considers options to close the gap.

City Manager Shields presented the revision and options for the coming fiscal year, saying, “we presented to the city council a $1,200,000 revision to the revenue forecast for FY26.” He told residents the council has directed staff to advertise a $1.21 tax rate and a personal-property tax rate of $5 per $100 of assessed value; public hearings and final consideration are scheduled in coming weeks.

The revenue revision follows weaker-than-expected third-quarter receipts for sales and meals taxes, the city manager said, which he described as “real time” indicators of household spending. City leaders also noted strong assessed-value growth this year—about 10.5% overall, with roughly 12% commercial growth and 6.9% residential growth—which partially offsets the shortfall.

Why it matters: the city faces a choice between raising revenue or cutting spending at a time when both school enrollment and city service costs are rising. The proposed unified FY26 budget totals about $133 million. The general government budget is roughly $57.7 million (a 6.5% increase) and the school transfer is roughly $55.6 million (about a 5.6% increase). Staff estimates that different tax-rate choices would shift the median homeowner’s bill: a larger cut to the rate would require deeper program reductions, while a smaller change would require smaller reductions or none.

Schoo…