The Alexandria City Council unanimously adopted a budget Monday night that includes tax and fee increases on everything from real estate and trash collection to restaurant meals and ambulance trips.
The council approved a 1.5-cent increase in the real estate tax, bringing the rate to 84.5 cents for every $100 of assessed value.
The rate is still the lowest among major Northern Virginia jurisdictions, officials said.
At the City Council’s request, City Manager James Hartmann had presented a draft budget in February that did not include an increase in the residential real estate tax.
But shortly afterward, a faltering economy and the loss of anticipated transportation funds from the Northern Virginia Transportation Authority led the council to advise a maximum real estate tax increase of 4.5 cents.
The Virginia Supreme Court had ruled in February that the taxes levied by the NVTA for Northern Virginia jurisdictions were unconstitutional, obliterating $16 million Alexandria officials were expecting to be able to use for transportation projects.
The council also voted Monday to increase the hotel tax from 5.5 percent to 6.5 percent and to raise the tax it charges for restaurant meals from 3 to 4 percent, keeping Alexandria’s meal tax even with neighboring Arlington County.
Unlike surrounding jurisdictions, the council elected not to raise the commercial real estate tax above the residential one — an option the Virginia General Assembly recently made available to Northern Virginia jurisdictions to help raise money for transportation projects.
Council members have said the tax would be too burdensome on the city’s many small businesses, but Mayor William Euille made clear Monday night that the option was not off the table permanently.
“This is a matter the council can revisit at a future date,” he said. Arlington and Fairfax, which both house several large corporate headquarters, raised their commercial tax rates by 12.5 cents and 11 cents, respectively.
The council boosted the fee for some ambulance trips by $125 and raised parking meter rates by 25 to 50 cents an hour.
The $542 million fiscal 2009 operating budget is 4.3 percent higher than the city’s budget last year. Although several council members called the budget the toughest they have had to deal with, they warned that next year may be even more challenging.
“We have taken tonight a lot of very significant revenue options that will not be there for us next year,” Councilman Justin Wilson said.
Council members cited burgeoning capital needs, an underfunded fire department and underpaid city employees as the most critical issues the city faces next year.
