Manassas City Manager's Proposed Budget includes Spike in Property Tax Bills
The real estate tax rate would fall under the proposed budget, but homeowners' tax and utility bills will rise.
By Cameron Delean
INSIDE NOVA REPORTER
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Manassas City Manager Steve Burke presented a proposed $422.9 million fiscal 2027 budget to City Council Tuesday that would reduce the real estate tax rate but increase the average homeowner’s tax bill and utility rates.
The increased bill would be sparked largely by a surge in commercial and industrial property values tied to data center growth.
The proposed spending plan includes a real estate tax rate of $1.24 per $100 of assessed value, a 2-cent reduction from fiscal 2026. Staff are recommending a general fund rate of $1.05 per $100 of assessed value and a flat 19-cent levy to support fire and rescue operations.
“The good news for tonight, as a result of the increase in commercial, industrial tax revenue, staff are happy to propose a reduced real estate tax rate of $1.05, which is a reduction of two cents on the real estate tax rate,” Burke said. “In order to continue our fire and rescue operations, we are proposing a flat levy at 19 cents.”
Despite the lower rate, the average residential tax bill would rise by $289 a year, or about $24 per month, while nonresidential tax bills would increase by $1,348 annually, or about $112 per month.
Burke said the city underestimated the strength of the local real estate market in 2026.
“We had anticipated moderate increases in property values, and again, thanks to the efforts of our commissioner of revenues office, they have identified that 2026 was a great year for the city of Manassas. Real estate values increased by $995 million with $461 million associated with new construction,” he said, noting the increase is being driven by the data center industry.
The proposed budget includes the city’s transfer to Manassas City Public Schools but does not include the full school system budget.
Utilities
On the utility side, officials said rising demand and infrastructure needs, including those related to data centers, are driving investment.
“The primary increase of our utility funds is associated with the anticipated increased power that will be sold at data centers. We also have increases in our airport construction projects and our stormwater projects,” she said.
Burke said city operations are also facing sharp increases in the cost of materials and services.
“Like our residents, the city is experiencing significant increases in the cost for commodities and services,” Burke said. “This chart identifies examples of these increases that reflect costs increasing 200 to 300% in recent years.”
To keep enterprise funds self-sustaining, the proposal calls for utility rate increases. Burke said the city is proposing a 10.5% increase for electric rates, a 9.5% increase for water rates and a 3% increase for sewer rates, along with a $1.50 increase for nonresidential stormwater rates.
The proposed utility rates will be discussed with council at a March 18 session.
The fiscal 2027 proposal also includes six new positions, including airport roles funded through commercial flight agreements, two firefighter positions that appeared but were unfunded in the fiscal 2026 budget, an assistant city attorney focused on social services work historically handled by outside firms and continued support for an emergency management planner position previously supported by federal grants.
The plan would also use general fund reserves for capital and housing initiatives, including $3 million toward a housing project, $12 million for a downtown parking garage and the creation of a $2 million housing investment fund. An additional $1 million in unallocated funds would be set aside for council to direct during deliberations.
“Proposing some use of general fund reserves, specifically, $3 million towards our housing project, $12 million towards the parking garage, and the establishment of a housing investment fund with the $2 million so that we can continue new housing efforts,” Burke said.
Burke added the spending plan is a living document that may require adjustment due to outside impacts.
The budget will be reviewed during a series of council work sessions, public town halls and workshops, with a public hearing targeted for the April 22 council meeting. Councilmembers did not raise immediate questions following the presentation Tuesday.
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