Fairfax County Executive Bryan Hill presented his proposed FY 2026 Advertised Budget Plan on Tuesday. Hill suggested a 1.5-cent real estate tax rate increase to $1.14 per $100 assessed value. That would generate $50.9 million, bringing the average homeowner's increase to slightly over $638.
Hill suggested a 3 percent prepared food and beverage tax that, if in effect January 2026, would generate net revenue of $48.1 million over six months. "That could be invested in county priorities or a portion of which could eliminate the need for a real estate tax rate increase in this budget," said Hill.
Hill noted that the county's commercial/industrial percentage of the total real estate assessment base decreased from 15.58 percent in FY 2025 to 14.80 percent in FY 2026. He said responsible budgeting is about balance, and his proposed budget included equal growth for county disbursements and transfers to Fairfax County Public Schools, with a growth rate of just under four-and-a-half percent. Hill acknowledged the proposed budget did not fully fund the superintendent's requested operating transfer. “A tight budget brings difficult choices, and one of the most challenging this year is funding the support of our schools. The superintendent's proposed budget includes a $268 million increase in school operating transfer, or about 10.4 percent slightly less than the amount discussed at our November forecast meeting. This transfer request exceeds last year's $254 million requests, which was the largest dollar increase request in county history,” Hill said.
Hill's proposed budget focused on compensation for county employees. It fully funded the county's collective bargaining agreements with IAFF Local 2068: Fairfax County Professional Fire Fighters and the Fairfax County Chapter of the Southern States Police Benevolent Association and provided a full compensation package for non-represented employees.
However, given the moderate revenue growth projected, the advertised budget did not include major investments in many county priorities.
Hill proposed a 2 percent increase to the transient occupancy (hotel) tax to mitigate further increases to the real estate tax rate. That would bring the rate from four to six percent and generate just over $13 million, a 6 percent rate that aligns with many jurisdictions in the area. "Half of this additional revenue is mandated for tourism promotion and has been held in balance pending discussions on its use. The remaining half can be utilized as general fund revenue and can be applied to balance the budget," Hill said. He noted that the state offers counties few revenue-generating options. Real estate tax is Fairfax County's primary revenue source.
Hill proposed dedicating an additional quarter penny of the real estate tax rate, or $8.5 million, for affordable housing to support the county's goal of reaching 10,000 new affordable homes by 2034.
This budget marks Hill's eighth as county executive. He said it had "been one of the most difficult ones" that he had to deal with, more so than during COVID when federal dollars came to the rescue. Hill said his 2026 Advertised Budget was set against "great uncertainty for our region, as the new presidential administration has begun taking actions to significantly reshape the federal government. … Fairfax County is home to more than 50,000 federal workers, and even more workers are connected to businesses contracted with the federal government," Hill said.
Hill said they are seeing workers being laid off or furloughed and that the broader economic impacts of some of the president's actions, particularly concerning policies like tariffs, have yet to be realized. "It will be imperative for us to continually monitor actions at the federal level to determine if any updates to our revenue or expenditure projections are necessary, " he said.
Hill's budget included $60 million in reductions, with 208 merit positions eliminated. Hill acknowledged that while the proposal focused on pay and benefits for county employees, other adjustments proved necessary, such as those "to address inflation, debt service obligations, state and federal mandates, new facilities and information technology needs."
Hill reiterated that the state does not fully meet its obligation for funding Fairfax County Schools according to a 2023 study by the Joint Legislative Audit and Review Commission (JLARC). Fairfax County makes up for state funding shortfalls with additional local funding.
Jeff McKay, chairman of the Fairfax County Board of Supervisors, clarified after Hill's presentation that every impacted merit employee would be offered another opportunity within the county. "That's one of the reasons for the proposed one-and-a-half cent tax increase. We have included employee compensation consistent with what our metrics show and consistent with what we know is necessary to retain the best and brightest employees."
"Clearly that is not what's happening across the river," said McKay. "As I mentioned earlier, this is going to have a significant, and you acknowledge significant, impact on our budget moving forward.
"The way you treat your employees says a lot about your organization."
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