Recommended Fredericksburg City Budget Includes 4-Cent Real Estate Tax Increase
City Manager Tim Baroody presented his recommended budget for fiscal year 2027 during Tuesday's City Council meeting.
By Adele Uphaus
MANAGING EDITOR AND CORRESPONDENT
Email Adele
Fredericksburg City Manager Tim Baroody on Tuesday presented a $141.4 million general fund budget for the fiscal year beginning July 1—pared down from $150 million in department requests.
“That reflects the magnitude of growth in demand that city departments see for city services and infrastructure,” Baroody said during Tuesday’s City Council meeting.
Baroody’s recommended budget for fiscal year 2027 (July 1, 2026 through June 30, 2027) is an increase of $4 million, or 3.3%, over the current fiscal year. It includes a 4-cent increase on the real estate tax rate, bringing the rate to $0.84 per $100 of assessed value.
The budget forecasts “modest growth” with year-over-year revenue growth at 2.72%, but real estate tax revenue projections for next fiscal year are flat, “not because we have not seen any new construction, but in part because we’ve seen more real property come off the tax rolls,” Baroody said.
He said Council will talk more about this issue in an upcoming work session.
Other major drivers that lead to the proposed tax rate increase include “compensation to remain competitive, additional positions to serve the growing community, support for public safety professionals, investment in City schools, and support for our partner agencies,” Baroody said.
“While context will not reduce the weight of this proposed levy, it is noteworthy to report that the City of Fredericksburg has the fourth lowest real estate tax rate out Virginia’s 38 independent cities,” he said.
Baroody noted that unlike counties, independent cities in Virginia are responsible for services such as snow removal, street and sidewalk maintenance, and tree planting. As an example, he said that the city spent $200,000 in local money on clean-up after Winter Storm Fern in January.
“Our neighboring counties do not fund these efforts, and the City of Fredericksburg does this work better than most, I would argue,” Baroody said. “We continue to discuss opportunities to better spread tax burden with less focus on real estate. This includes more robust economic development and redevelopment efforts” and consideration of adjustments to meals and sales tax.
Baroody is also recommending an 8% increase to water and sewer rates, which for the “average user” will result in an approximate increase of $6 per month.
“We will also recommend a two-tier system, whereby major users above 25,000 gallons [of water] per day will be charged a higher rate,” he said.
The proposed budget funds seven new positions, down from 40 that departments requested. Four of the new positions are firefighter/EMTs, one is a Human Resources policy analyst, one is a revenue collection specialist, and one is in IT.
The budget funds a $1.4 million public safety pay plan, “a heavy lift” which has been crafted over several years and will improve public safety by improving recruitment and retention, Baroody said.
It also makes investments in “critical, hard to hire positions” across many departments, including custodians and crew members. Baroody said more details about these investments will be provided during later work sessions with Council.
Baroody’s recommended budget includes about $38 million for the school division, which is an increase of $750,000 over the current fiscal year—less than the $2.7 million in local funding requested by the School Board.
According to a summary of the budget posted online, the $750,000 increase is “balanced against estimated increase to state aid to City Schools of [$2.5 million], or 10.0%, over the FY 2026 state aid amount.”
“By prioritizing new revenue growth and leveraging cash management strategies, the City reaffirms its strong support for improved educational outcomes with additional funding in state aid in mind,” the summary states.
There will be a joint meeting between City Council and the School Board to discuss school funding on April 7.
Baroody’s recommended budget funds most of city’s partner agencies at the same level as the current fiscal year’s budget. Exceptions are the Central Rappahannock Regional Library, which would receive an increase of $99,239 for a total of $1.7 million (reflecting the library’s full request); the Virginia Cooperative Extension Master Gardeners, which will receive $5,000 and was not funded this fiscal year; and the Thurman Brisben Center, which will receive $40,000 and also was not funded this fiscal year.
Baroody noted that the total $300,000 proposed for homeless services, which includes the Brisben Center, is contingent on agencies’ “monthly engagement with the [Fredericksburg Regional Continuum of Care] and participation in its homeless management information system.”
There will be a public hearing on the proposed budget and tax rate on April 21, and Council is expected to adopt the budget on May 12.
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