Fairfax City council narrows FY2026 options; directs staff to prepare budget for 2.5¢ real-estate increase and no meals-tax hike

Fairfax City Council moved toward a compromise on the proposed FY2026 budget on April 22, directing staff to prepare adoption paperwork for a real-estate tax increase of 2.5 cents per $100 of assessed value and to hold the meals tax at 4 percent.

The direction followed a long work session and public hearings in which residents and business owners urged caution about higher taxes while staff and council members debated a range of trade-offs—pay and benefits for city employees, a recommended pay-study implementation to correct wage inequities in the city’s property-yard workforce, and several one‑time and ongoing reductions.

Why it matters: the manager’s original proposal included a larger set of revenue and expenditure assumptions; council members said they did not want to add a meals-tax increase after hearing many local restaurateurs warn a higher meals tax would put Fairfax City at a competitive disadvantage with neighboring jurisdictions. At the same time, staff warned that the single largest driver of increased expenses is the city’s tuition contract with Fairfax County Public Schools, which staff has projected to rise sharply in FY2026.

Key cou…