Could a Penny on the Dollar Raise $35.9 Million for Alexandria Schools and Transit?
City staff estimates a one-point sales tax increase could raise $35.9 million a year for eligible projects. Voters would have to approve it.
A one-percentage-point sales tax increase could raise about $35.9 million a year for Alexandria, according to a city staff estimate. The money could support eligible school construction or renovations, public transportation, or a combination of the two. There is no approved tax increase.
The option was outlined in the November 7 City Council budget-retreat slides. At the full percentage point, the general sales tax rate would rise from 6% to 7%. The estimate excludes groceries and personal hygiene products. Council would have to put the question on the ballot, voters would have to approve it, and Council would then have to adopt an ordinance implementing it.
City staff recommends working with Alexandria’s General Assembly delegation to revise the state law. One limitation: the revenue cannot pay previously authorized school construction debt.
The same retreat materials project a separate $10 million to $15 million gap in the city’s FY2028 operating budget. Because the sales tax proceeds would be restricted to eligible uses, the estimate does not represent unrestricted revenue to close that gap.
