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Vienna staff present balanced FY2026 budget that holds tax rate steady, flags water/sewer hike
Summary
Town staff presented a balanced fiscal 2026 budget that keeps the town tax rate unchanged while forecasting a 5.1% rise in general fund revenue driven by assessments and business license growth; water and sewer rates would rise about 7.25% and the quarterly service charge would go from $40 to $42.
Town staff on Saturday presented a proposed balanced budget for fiscal 2026 that recommends keeping Vienna’s town tax rate unchanged while planning for modest revenue growth and targeted new initiatives.
The administration’s forecast calls for about $1.6 million (roughly 5.1%) more general fund revenue over the prior year, driven largely by higher real-estate assessments — about a 6.4% residential increase and a 2.5% commercial increase — and recovering business-license receipts, Finance Director Stephen Barlow said during the work session. Barlow described business-license and sales-tax receipts as stronger than in prior years and said meals-tax receipts have increased regionally.
Town staff urged caution about changing the tax rate because of short-term economic uncertainty. “Since 2011, we have not raised the tax rate,” the town manager said, noting the council can change assumptions during the process. Staff quantified the sensitivity: “1¢ on the tax rate up or down is a $748,000 hit to the general fund,” the town manager said.
The proposed budget includes a recommended water and sewer rate package intended to cover higher wholesale costs. Staff said work to refine numbers reduced an expected 10% increase to a proposed 7.25% increase in water and sewer charges; the fixed quarterly service charge in the proposal would rise from $40 to $42. Finance staff attributed most of that increase to a 9% rise in Fairfax Water wholesale costs and other contract increases.
Staff flagged reserves as a buffer: the town maintains a revenue stabilization fund and an 18% fund balance reserve, which officials said would help smooth unexpected downturns.
Why it matters: holding the tax rate steady while using assessment growth and business revenue to balance the books avoids a levy increase but still raises household bills through higher assessments and utility charges. Council will consider the proposed budget in further work sessions and public hearings before a final vote in May.
Next steps: staff will return at the next work session (and public hearings in April) with department-level details and documentation requested by councilors; the council is scheduled to vote on adoption in May.
