Fredericksburg City Manager's Budget Proposes 3-Cent Tax Rate Increase
By Adele Uphaus
MANAGING EDITOR AND CORRESPONDENT
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Fredericksburg City Manager Tim Baroody is recommending a 3-cent increase to the real estate tax rate in the budget for next fiscal year.
Baroody presented his proposed budget for fiscal year 2026, which begins July 1, at Tuesday evening’s City Council meeting. The $136.7 million total budget is driven by “substantially increased” funding for the city school division, as well as increased funding to the Rappahannock Regional Jail and for day-to-day city operations, Baroody said.
Funding for the school division increases by $4 million over last year in the proposed budget, from $33 to $37 million.
“This recommendation supports the opening of the new Gladys West Elementary School and the new Walker-Grant Middle School,” Baroody said. “The increase includes the $2.5 million requested and long expected to fund operational expenses related to the new middle school.”
Baroody said the proposed budget relies on a real estate tax increase because the city is forecast to see only “minimal or stabilized growth” compared to the current fiscal year.
“The large growth that was recognized during the FY 2024 budget has stabilized as it relates to consumption based revenues,” Baroody said. “Therefore these sources do not provide the natural growth to keep other tax rates level.”
He noted that Fredericksburg has the third-lowest real estate tax rate out of Virginia’s independent cities.
The real property tax increase is projected to bring in $45.6 million in revenue next fiscal year, 4.5% more than tax revenues included in the current budget.
Given uncertainty about how federal workforce reductions and funding changes could affect localities, Baroody’s proposed budget comes with “embedded levers” aimed at reducing expenditures quickly if needed, he said.
City Council will continue working on and discussing the budget at every meeting going forward. A joint work session with the school division is planned for April 1 and a public hearing is scheduled on April 15. The budget calendar and all budget information is available on the city’s website.
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