Fairfax County’s annual budget process is underway! County Executive Bryan Hill released his proposed FY 2022 county budget last week; during the next two months or so, the Board of Supervisors will examine the budget proposals, and make adjustments, before approving a final budget on May 4. By law, budgets for Virginia localities must be balanced; they cannot run a deficit.
Under Virginia’s antiquated tax structure, the real estate tax, on both residential and non-residential properties, is the principal source of support for county services. Real estate taxes account for nearly 68 percent of General Fund receipts; personal property taxes account for another 14 percent. The other 16 percent comes from a variety of local sales and license taxes and fees, including revenue from the Commonwealth and the federal government, a tiny fraction at 3.2 percent of the total. The Virginia General Assembly has been loathe to make any major changes to the tax structure. In 1950, Virginia was a rural state with a rural tax base; today, Virginia is an urban state, still with a rural tax base.
Countywide, non-residential real estate experienced a decline in value because of increased vacancy and overall market risk, as the pandemic affected an already weakened retail sector. Residential real estate increased in value because of record low interest rates, coupled with low inventory. In other words, people are looking to take advantage of historically low mortgage rates, but can’t find the home they want. Demand is greater than the supply, and those who do purchase often are willing to pay well more than the asking price.
Those higher purchase prices affect the assessments of neighboring properties and, in a few Mason District neighborhoods, the increase was in the 10 to 14 percent range. The mean and median rates of change in Mason District were 5.13 and 5.34, respectively. In 2020, the highest sold price in Mason District for vacant land was $399,900 for a third of an acre in Raymondale; the highest price for a house was $2,250,000 in Lake Barcroft. Although some residential areas of the Dranesville, Hunter Mill, and Springfield magisterial districts experienced decreases in values, that was not the case in Mason District, perhaps reflecting the realtors’ mantra of “location, location, and location!” Mason District’s location in the core of the region bodes well for current and future opportunities.
In the FY 2022 Advertised Budget Plan, 52.8 percent of disbursements, or $2.367 billion, is proposed for the school transfer. The next largest disbursement categories are public safety, at $537 million (12 percent) and health and welfare, at $502 million (11.2 percent). The proposed budget does not include any recommendations for employee compensation increases. Readers may recall that, last year, the pre-pandemic county budget recommended a three percent increase in compensation, but that budget was withdrawn and re-written to address the effect of the pandemic on the county’s economy. The County Executive’s proposal recommends a one-cent decrease in the real estate tax rate, from $1.15 to $1.14 per assessed $100 valuation.
The Mason District Budget Town Meeting will be held, virtually, on Monday, March 15, from 7 – 8:30 p.m. Chief Financial Officer Joe Mondoro and Department of Management and Budget Director Christina Jackson will present the budget, followed by a question and period. Please email my office at [email protected] to obtain the link to the virtual meeting. Public hearings about the budget proposal will be conducted on April 13, 14, and 15. More information about that will be provided in future columns.
Penny Gross is the Mason District Supervisor, in the Fairfax County Board of Supervisors. She may be emailed at [email protected]