Alexandria budget targets infrastructure in $956.5M package

The City of Alexandria, Virginia, has adopted a $956.5 million operating budget for fiscal year (FY) 2026, reflecting a 3.2% increase over the FY 2025 budget of $926.4 million. With approximately 20% of Alexandria’s workforce employed by the federal government, the city recognizes the importance of aligning its budget planning with the broader economic landscape and evolving workforce trends.

The FY 2026 budget maintains the existing real estate and personal property tax rates. The only fee increase is to the stormwater utility rate, which will rise from $324.10 to $340.30 annually. Officials say the budget allows Alexandria to continue investing in core services and build on many of the priorities funded in the previous fiscal year.

In FY 2025, the city increased the real estate tax rate by 2.5 cents per $100 of assessed value. The additional revenue funded major initiatives, including a $14.3 million boost to Alexandria City Public Schools (ACPS) for teacher pay, a $3 million allocation to affordable housing, and infrastructure improvements. While Alexandria’s property taxes are higher than some neighboring jurisdictions, they remain moderate compared to similarly sized cities in the Northeast and Midwest.

For FY 2026, Alexandria is relying on growth in property values, modest economic expansion and disciplined budgeting to fund service enhancements without increasing tax rates. City officials say this approach reflects confidence in the city’s fiscal resilience and commitment to avoiding further tax burdens.

Key Highlights of the FY 2026 Budget:

Education: ACPS’s Combined Funds Budget is $395.2 million, including a $366.2 million operating budget—a 4.6% increase from FY 2025. The budget includes a 1% pay scale adjustment for ACPS staff.
City employee compensation: Employees not under collective bargaining agreements will receive a step increase and a 1% pay scale adjustment. The budget also honors labor agreements for fire, police and trades workers.
Capital Improvement Program (CIP): A 10-year, $2.1 billion investment plan focuses on stormwater infrastructure, school facilities and maintenance of public assets. The 2026 allocation ($205.9 million) will see major investments in public schools ($21 million), waterfront flood mitigation ($40 million), city property renovations ($19.3 million) and more.
Health and social services: A one-time $1.2 million allocation will support physical, social and emotional wellness services for students and families. Additional funding is provided for neighborhood health and local food access programs.
Transportation: Increased funding for the Alexandria Transit Company (DASH) addresses collective bargaining obligations and rising operational costs.
Housing support: The Rental Pilot Subsidy Program receives expanded funding to help low-income residents secure affordable housing.
Climate action: Funding for the Office of Climate Action is preserved, with $200,000 held in contingency, pending a detailed spending plan due in October.
Community support: The budget includes $25,000 in one-time funding for the Capital Area Food Bank and $25,000 for ongoing small business support.