Alexandria's budget is showing signs of an economic recovery for the first time in three years, but some city residents still face the prospect of higher tax bills and local businesses will be asked to pay more to help finance road projects.
City Manager James Hartmann on Tuesday presented City Council with a $553.4 million proposed budget that would increase the city's operating budget 4.1 percent from last year. The budget for Alexandria City Public Schools would increase at the same rate.
It's a significant improvement over last year, when Alexandria faced a $44 million budget shortfall.
Hartmann's proposal wouldn't raise taxes or increase any city fees and it includes no cuts in city services.
While property tax rates won't increase, about 46 percent of the city's residents are likely to see higher tax bills because property values have increased, city officials said. Another 38 percent of residents will see their taxes decrease while 17 percent will remain the same.
Taxes would rise for some businesses, however. Hartmann's budget calls for a special tax to be levied on commercial properties, a proposal business leaders were quick to denounce.
"The business community is being threatened with shouldering the lion's share of the bill," said Alexandria Chamber of Commerce President Tina Leone. "This tax is not right for Alexandria, nor is it equitable."
The council is considering adding 12.5 cents per $100 of assessed value to the bills of 2,250 local businesses and dedicating the additional revenue -- as much as $189 million over 10 years -- to local transportation projects.
The General Assembly in 2007 agreed to allow Northern Virginia communities to assess the special tax on commercial property and set the maximum levy at 12.5 cents. Fairfax County levied the tax at 11 cents. Arlington County levied it at 12.5 cents.
Alexandria previously considered adopting the special tax at a lower rate of 3 cents, but the proposal was squelched by the City Council.
To offset the higher taxes on business, Hartmann proposed changing Alexandria's business-license and gross-receipt taxes to reduce the costs for 2,247 small-business owners by an average of $723 a year.
"We're in a good position right now," Hartmann said. "But we're being very mindful going forward of our sustainability and our expenditures for the future."
