Alexandria City Manager Presents FY 2026 Proposed Budget

Page updated on February 25, 2025 at 10:40 PM
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On Tuesday, February 25, City Manager James Parajon presented the proposed operating and capital budget for Fiscal Year (FY) 2026 to the Alexandria City Council. The FY 2026 Proposed Budget is the result of careful analysis and fiscal prudence, focusing on service delivery, resident quality of life, program sustainability, affordability, and community investment. 

“In crafting this year’s budget, we built on the progress made over previous years by making investments that residents can feel improve their lives,” said City Manager James Parajon. “When they see the investments into our schools and youth programs, our infrastructure, the funding to support diversifying our housing options, and our funding commitment to pursue impactful economic growth, they know their City leaders are building on our progress towards a thriving future.” 

The proposed budget, while focused on the community’s priorities, is being developed during unprecedented times in our country. The federal administration’s policies and directives present an uncertain future for many of our residents, including over 13,000 federal workers residing in our city and our immigrant community. It is against this backdrop that the FY 2026 budget is developed. The FY 2026 Proposed General Fund Operating Budget totals $956.5 million and prioritizes key investments without proposing a real estate or property tax rate increase, or significant service reductions. The budget recommends a step increase and a 1% pay scale adjustment for non-collectively bargained City employees and funds the respective collective bargaining agreements for Fire, Police, and Labor and Trades groups. 

The proposed budget also makes significant investments in City Council priority areas, including employee attraction and retention, affordable housing, eliminating community disparities, and improving the City’s economic strength. 

 

Key highlights of the proposed budget include:  

  • Maintains the current real estate tax rate of $1.135 per $100 of assessed value.  
  • Does not propose changes to personal property tax, sanitary sewer, or refuse rates.  
  • Increases stormwater utility fee rates from $324.10 to $349.30 as scheduled.  
  • Funds an increase of $8.2M – which is 3.0% - in the ACPS Operating transfer to support the ACPS operating budget and a 1% pay scale adjustment for ACPS staff.  
  • Increases DASH funding to support collective bargaining and inflationary costs of operations.  
  • Supports community-based food hub operations. 
  • Funds a business accelerator pilot program operated by the Alexandria Economic Development Partnership (AEDP).  
  • Allocates funding for early childhood support and intervention projects.  
  • Increases funding for Neighborhood Health, a Federally Qualified Health Center. 
  • Uses $6.4 million in efficiency and cost-cutting savings to balance the budget.  

The Proposed FY 2026 – 2035 Capital Improvement Program (CIP) totals $2.08 billion and is focused on improving our existing infrastructure and making strategic new investments. 

 

Funding Allocated for FY 2026 Capital Budget Projects: 

  • $21.0 million for Alexandria City Public Schools capital funding request - in line with the funding level requested for FY 2026 in the School Board Approved capital funding request.  
  • $40.0 million to support the Waterfront Flood Mitigation project.  
  • $15.4 million for the City’s contribution to WMATA’s Capital Improvement Program. 
  • $19.3 million for the renovation of City Hall, Market Square Plaza, and Parking Garage. 
  • $5.5 million for street reconstruction and resurfacing, which will support the resurfacing of approximately 50-55 lane miles in FY 2026.  
  • $5.0 million to provide multimodal upgrades as part of the South Van Dorn Bridges project.  
  • $5.2 million to support DASH Bus Fleet Replacement/State of Good Repair.  
  • $1.8 million to support the Old Town Pool Renovation project.  

 

Participate in Alexandria’s FY 2026 Budget Process 

Residents are strongly encouraged to participate in the budget discussions, as community insights and feedback are invaluable in shaping a budget that truly reflects the needs and aspirations of our city. By engaging in this process, residents can help ensure that our collective vision for the future of Alexandria is realized, creating a stronger, more vibrant city for everyone. 

 

Attend a FY 2026 Budget Event 

City Council and City Staff will hold a series of meetings during the budget process to discuss and deliberate the FY 2026 budget. This year, there will be five budget public hearings and a public presentation. All events listed begin at 7 p.m., unless otherwise noted. Scheduled budget meetings will have both in-person and remote attendance options. Visit alexandriava.gov/Budget for the most up-to-date list of meeting dates, times, and locations.  

 

Stay Informed and Engaged 

For more details on the budget process and upcoming meetings go to alexandriava.gov/Budget. Public participation is crucial to ensuring the future the City of Alexandria is building remains one where all can succeed.