Alexandria City Council unanimously adopts $979.1M FY 2027 budget, holds tax rate flat

Updated April 30 with response from ACPS School Board Chair Dr. Michelle Rief and Councilmember Abdel-Rahman Elnoubi. Full update notes at bottom.

ALEXANDRIA, Va. — Alexandria City Council unanimously adopted a $979,063,681 FY 2027 general fund operating budget Wednesday night, holding the real estate tax rate flat at $1.135 per $100 of assessed value and approving a 10-year capital improvement program totaling $2,020,217,368.

Every roll call across the night's 12 docket items was 6-0. Eleven of them passed without discussion at Wednesday's meeting, although every item had been deliberated extensively over the preceding two months — through budget work sessions, two public hearings, the April 18 add/delete public hearing, and the April 21 preliminary add/delete work session, where council reached majority support on all 11 council member proposals and cancelled an April 27 follow-up. Only the final item — adoption of the operating budget and CIP — drew remarks from council Wednesday, with every council member speaking before the vote. The meeting ran from 6:04 p.m. to 6:36 p.m.

Sandy Marks, who won the April 21 special election to fill the seat vacated by former Councilman R. Kirk McPike, will not be sworn in until May 12. The body that adopted the budget was Mayor Alyia Gaskins, Vice Mayor Sarah Bagley, and Councilmembers Canek Aguirre, John Taylor Chapman, Abdel-Rahman Elnoubi, and Jacinta Greene.

Tax rate held at $1.135

Council made no change to the real estate tax rate, leaving it at $1.135 per $100 of assessed value — unchanged from calendar year 2025 and matching City Manager James Parajon's proposed budget.

Bagley moved the ordinance, Greene seconded, and the motion passed 6-0 without discussion. The rate preserves the city's existing 1-cent dedication for affordable housing, the 2.2-cent reservation for transportation projects, and the 20-cent Tier I Potomac Yard Special Services District tax.

Although the rate is flat, the average Alexandria homeowner will still pay roughly $504 more per year because of rising assessments. Under Virginia law, the increase qualifies as an "effective tax rate increase" because $1.135 generates more than 101% of last year's revenue. The rate that would have produced exactly 101% was $1.107, according to the staff memo.

One cent on the real estate rate generates approximately $4.9 million in FY 2027.

Council had earlier set a $1.145 ceiling in March to preserve the option of a one-cent increase to address a $5.6 million gap between what Alexandria City Public Schools had requested and what the city manager's budget provided. Council ultimately did not move off Parajon's flat rate. The approved budget includes a $4.2 million increase in the ACPS operating transfer — the level set by council's budget guidance, but $5.6 million below the school division's full request.

Sunday parking formally rejected

The first substantive vote of the night formally killed the proposed expansion of metered parking to Sundays. Aguirre moved to disapprove the ordinance, Chapman seconded, and the motion passed 6-0 without discussion. The staff memo noted the ordinance was placed on the docket "to provide closure in the form of a final vote" after the April 21 work session showed there was not majority support.

In place of Sunday meters, council adopted the package the work session had settled on: hourly meter rates rising from $1.75 to $2.75 (Item 11, the largest revenue lift at approximately $2.4 million annually), parking citations rising from $40 to $55 (Item 4, approximately $1.35 million), and a stormwater utility fee increase from $340.30 to $357.40 per billing unit (Item 5, approximately $1.1 million).

BPOL increase, fee package adopted

Council adopted the Add/Delete proposal raising the Business, Professional and Occupational License tax rate for financial services businesses from $0.35 to $0.40 per $100 of gross receipts — the first increase in that category in at least 30 years. Elnoubi moved, Aguirre seconded, and the motion passed unanimously. The increase, effective Jan. 1, 2027, is projected to generate $458,500 in FY 2027 to fund expanded emergency rental assistance.

At the April 21 preliminary Add/Delete work session, Chapman had not supported the BPOL increase, citing concerns about business mobility. He voted yes Wednesday on final passage.

Council also adopted fire prevention fee increases (an additional $418,338, with the largest piece a fire protection testing fee jump from $162 to $220 per hour), Office of Historic Alexandria fee adjustments, Planning & Zoning development and historic preservation fees, and a Recreation, Parks and Cultural Activities fee package.

Chapman: fee increases substituting for tax increases is "not sustainable"

Chapman cast all 12 votes in the affirmative — but used his comments before the budget vote to push back on the framing that holding the tax rate flat was an unambiguous win.

"I do see things a little bit differently around celebrating no tax increase," Chapman said. "Over the past couple of years, as we've not raised kind of property taxes, is we've raised a lot of fees. And I don't think that should go understated. There are going to be segments of our community that are going to find what they do, their regular business that they've done with the city, a little bit less affordable because we've changed those fees directly for the purposes of trying to fill holes in our budget. I don't think that's sustainable."

Chapman also called for revisiting the council's Add/Delete process, suggesting more transparency about which proposals are submitted and why some don't advance. He noted, without naming a sponsor, that an Add/Delete proposal for school funding had been submitted but did not receive enough support to move forward.

"Even though that was reported, it wasn't that no one on council put up a potential ad delete for that," Chapman said. "Maybe there is a level of transparency that needs to be addressed around what is making the cut, what is not making the cut as well."

The Alexandria Brief had previously reported, based on April 21 work session coverage, that no Add/Delete proposal had directly addressed the ACPS funding gap. Chapman's remarks Wednesday indicate that at least one such proposal was submitted but did not advance.

Bagley: federal job losses and what comes next

Bagley used her remarks to lift up the city's Budget and Fiscal Advisory Committee, the broader boards-and-commissions input, and the city's 311 system, which she said had flagged a staffing and compensation issue addressed in this budget.

She also noted the broader economic context.

"Alexandria was hardest hit, I think, in the country in terms of federal job loss and impacts," Bagley said. "And yet we didn't have to raise taxes here. And that's pretty significant an accomplishment, I think, for our staff. But we may not be so lucky next year."

Bagley said she would like to see the budget conversation continue year-round rather than confined to the two-month spring window — including discussions of the tax rate and policies like Sunday parking before the next budget cycle begins.

Elnoubi, Greene, Aguirre

Elnoubi, who spoke first, thanked staff for the "balanced budget, one that preserved the critical services and support without a property tax increase even as we faced slowing revenue growth." He listed schools, transit expansion, rental assistance, the after-school program, the jail operational efficiency study, economic development, affordable housing, public safety, and infrastructure as priorities reflected in the final package. In a written statement issued by his office after the meeting, Elnoubi said schools received "32% of all new funding in this budget." He closed the statement: "Budgets are hard. There are real constraints, real trade-offs, and rarely enough to go around. I believe we did right by this community tonight, and I'm proud of the budget we adopted."

Alexandria City School Board Chair Dr. Michelle Rief on Thursday afternoon issued a statement disputing characterizations of school funding made at adoption. "I would like to address and correct some inaccurate statements made by members of City Council during the FY 2027 Budget Adoption on April 29, 2026," Rief wrote. "Alexandria City Public Schools received 18.5% of new City funding to support the school division's FY 2027 Operating Budget."

Rief said the approved $286.6 million ACPS operating transfer represents 29.2% of the city's FY 2027 budget — "the lowest share of the General Fund allocated to school operations in more than a decade" — and noted Alexandria's local funding effort for public education "continues to rank among the lowest in Northern Virginia," citing the WABE Guide. She said ACPS made $7.5 million in spending reductions to balance its own FY 2027 budget, including a 5% reduction in non-personnel expenditures across all departments and schools, staff reductions, and shifting 5% of employee healthcare costs to employees.

Reached Thursday afternoon, Elnoubi walked The Alexandria Brief through the methodology behind the 32% figure. According to a response from his legislative aide Casey Geary, the figure represents schools' share of the year-over-year increase in General Fund expenditures from FY 2026 to FY 2027 in the City Manager's proposed budget. The ACPS operating transfer rose by $4.2 million and schools debt service rose by $2.5 million, for $6.7 million in new schools-related spending. Total General Fund expenditures grew by $20.9 million ($956.4 million in FY 2026 to $977.3 million in FY 2027 as proposed). $6.7 million divided by $20.9 million equals approximately 32%. Elnoubi's calculation is drawn from page 5.1 of the City Manager's proposed operating budget.

Rief, in a follow-up response Thursday, explained that her 18.5% figure uses a different methodology: the $4.2 million ACPS operating transfer increase divided by the $22.6 million total increase in the adopted FY 2027 budget over FY 2026. Rief's calculation includes only the operating transfer in the numerator — not schools debt service, which pays bondholders for school capital projects rather than flowing to the school division for operations — and uses the adopted budget as the denominator, which is approximately $1.7 million larger than the City Manager's proposed budget that Elnoubi referenced.

Both calculations are mathematically correct; they answer different questions about what counts as "funding ACPS."

Both Chapman and Elnoubi read disclosure statements before the operating budget vote. Chapman disclosed his ownership of Manumission Tour Company and its membership in Visit Alexandria. Elnoubi disclosed his employment with WMATA. Both said they had consulted with the city attorney and could vote under an applicable legal exception for members of a profession or group of three or more affected by a transaction.

Greene, who like several colleagues described the year as a difficult budget cycle, said: "We always end up with a solid outcome, and that speaks highly to our staff."

Aguirre organized his remarks around the platform he ran on — housing, education, and health — saying the budget addressed all three through expanded rental assistance, the ACPS transfer, and Greene's Healthy Homes addition. He noted that all city departments were asked to take a 1% cut except ACPS, which "we gave them pretty much all of the growth that we were getting as a city."

Gaskins: 'this is the most important thing we do'

Gaskins closed by tracing the budget back to the State of the Economy series she had asked Parajon to begin presenting at the start of every council meeting last fall, citing rising uncertainty in national, regional, and local economic conditions.

"As a council, I think we started then beginning to understand that this was going to be a difficult context in which we were preparing a budget," Gaskins said. "How do you continue to invest in all of the things that have been named up here that are critically important to our community while maintaining the affordability of our city?"

She thanked Parajon, the city clerk and city attorney, the budget staff (specifically naming Budget Director Morgan Routt and Assistant Budget Director Amanda Hamm), department heads, and the community.

"This should be conversations we're having every single day," Gaskins said. "At the end of the day, this is the most important thing we do. We can't do the big ideas. We can't invest in your vision if we don't have the resources to do it."

In a written statement issued by the city after the meeting, Gaskins called the budget a "simple and intentional focus: steady progress on housing, community services, economic development, and the people who keep this city running." Parajon, who did not speak during Wednesday's meeting, said in the same statement that he was "proud of the careful, collaborative work across departments."

What it took to get here

The 32-minute adoption was the visible end of a budget process that began with Parajon's proposed budget presentation in February and stretched through more than a dozen public meetings: two budget public hearings (March 9, March 14), a joint work session with the Alexandria School Board (March 4), six functional-area work sessions covering each portion of city government, the tax rate ceiling vote (March 10), the Add/Delete and tax rate public hearing (April 18), and the preliminary Add/Delete work session (April 21), where council reached majority support on all 11 council member proposals and cancelled the April 27 follow-up session.

The full adopted FY 2027 budget document will be available July 1 at alexandriava.gov/Budget. The fiscal year begins the same day.

What's next

May 8 — Deadline for residents to complete city's FY 2027 budget communications survey
May 12 — Sandy Marks sworn in to fill McPike's seat
July 1 — FY 2027 begins; new fees and rates take effect
Jan. 1, 2027 — BPOL financial services rate increase takes effect

Updates

April 30, 8 p.m.: Rief's methodology response, with the framing that both calculations are mathematically correct

April 30, 6:40 p.m.: This story has been updated with a response from Councilmember Abdel-Rahman Elnoubi explaining the methodology behind his 32% figure.

April 30, 4:30 p.m.: This story has been updated to include a statement from Alexandria City School Board Chair Dr. Michelle Rief disputing characterizations of school funding made during Wednesday's adoption meeting.

April 30, at 7:35 a.m.: Corrected the spelling of Councilman Chapman's company, it is Manumission Tour Company.

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