Amid federal budget-slashing efforts, Falls Church officials are keeping a watchful eye on about $50 million in approved grant funds.
So far, “we have not heard any word of adverse actions on those grant projects,” City Manager Wyatt Shields told City Council members Monday night.
Shields said about half the $50 million in the pipeline relates to transportation projects. The remainder is split among areas ranging from affordable housing to stormwater.
As in Arlington, Fairfax County and other Northern Virginia localities, there’s little for Falls Church officials to do but hold tight, make their voices heard and await developments.
Shields said he is confident the local projects being funded through federal dollars are appropriate.
“We’re working really hard to provide real value for taxpayers,” he said in the latest in a series of local discussions about the impact of actions being taken at the federal level.
The city manager will propose both his fiscal 2026 budget and an updated capital-spending plan in mid to late March.
Meals-Tax, Sales-Tax Revenues Down: Delays in opening and leasing up at some of Falls Church’s new mixed-use developments have caused recent tax-revenue streams to fall short of city leaders’ expectations.
For the first half of the city’s fiscal year, from July 1 to Dec. 31, meals-tax revenue was 8.7% below budget forecasts, while sales-tax revenue was 3% short.
Figures were detailed at a City Council meeting on Monday.
While meals-tax revenue was “on par” with the preceding year’s figures and sales-tax revenue was up 3.2% from a year before, the two revenue streams collectively were running nearly $370,000 behind expectations.
The big-picture takeaway: the city’s tax-revenue picture is “close to budget but slightly under — that’s the bottom line,” Shields said.
City officials hope that with Founders Row leasing up its retail spaces and Whole Foods now open at the Washington & Broad development, revenues will be more in line with projections for the second half of the city’s fiscal year.
Falls Church collects a 4% meals tax on top of sales tax from 148 establishments. In addition to taxing restaurant meals, city officials levy the tax on deli items, prepared foods and salad bars at restaurants, convenience stores and retail outlets.
While tax revenue was down, overall city-government revenue for the first six months of the fiscal year was up 0.6% from budget projections.
That represents an increase of about $300,000 above a projected $50.35 million, city officials said.
The increase was fueled by service charges and higher than anticipated investment income owing to elevated interest rates.
Shields told Council members “it’s always important for us to understand what our revenue picture is.” But that may be even more important now, given the uncertainty of federal revenue streams and the Northern Virginia economy as a whole.
