After just under a year spent fighting a $25 million shortfall, Arlington city staff are proposing a $769 million budget in the upcoming year. If adopted, the city expects to have a surplus of roughly $3.4 million to put into its reserve funds.
However, officials told council members during a work session meeting Aug. 4 that a slight increase in taxes may be needed to continue the quality of services the city currently provides.
The proposed budget is based on a scenario where the city’s tax rate stays the same, but water fees increase.
City Manager Trey Yelverton said there would be a lot of additional projects, such as extra street maintenance and additional homelessness services, that would not be addressed without a slight increase in taxes.
“At what point does the natural tension of citizens who want lower taxes meet citizens who want quality services?” Yelverton told council members. “Those things have natural tension. Our job is to make sure that we do it at the lowest possible cost for the best possible service, and hopefully something doesn’t break.”
Officials expect council to finalize and adopt the budget on Sept. 15, following a budget retreat meeting, budget town hall meetings and an initial public hearing.
While property tax revenue is expected to be lower than 2026 projections, officials believe sales tax and other revenues will hit their highest point since 2019.
Staff initially proposed to keep the city’s tax rate as it was last year, roughly 62 cents per $100 of assessed property value.
Last year, the city raised the rate by 3 cents amid budget woes following changes from the Tarrant Appraisal District and large tax valuation protests from residents.
However, council members and officials said there may be a need to look at bringing that rate higher to match the needs of the city.
This year, the taxable value of properties within Arlington dropped by 1.23%, Yelverton said, noting it is the second-largest drop in value this century for the city.
Residential values also took a hit. In 2026, the taxable value of residential property in the city dropped for the first time since 2013. This year saw an even higher decline, with a -5.13% change.
Yelverton said the number of tax appraisal protests, on top of a current appraisal freeze and lower tax valuations, also played a role in the budget. Some Arlington properties received a lower tax valuation than their market value, which affects how much revenue the city brings in, he added.
“I still think we see plenty of evidence that appraisals are too conservative relative to the market,” Yelverton said. “We look at that on a daily basis ourselves. Pretty consistently, at least 10% behind the market based on the data we’ve got.”
The difference between initial tax valuations of Arlington properties and post-protest valuations was roughly $5 billion, according to officials. Last year, that tally was $1 billion.
With the lowered tax value and high number of protests, the tax rate would need to increase to roughly 63 cents per $100 valuation to maintain the city’s base tax revenue.
Ahead of public tax hearings, governmental bodies must declare the highest rate they will consider. Some council members said they’d be open to setting that highest rate for meeting purposes at roughly 63 cents, which is classified as a no-new-revenue rate, then discuss what the actual rate will be.
Council member Mauricio Galante said the rate directly affects the level of services the city can provide for its residents, and that residents may need to pitch in to continue the current quality of services.
“The residents need to help us out to continue the level of service. It’s the level of service that’s what is in discussion, if it’s the no-new-revenue rate or voter-approval tax rate, because we can only do with what we can control,” Galante said.
Mayor Jim Ross said that he’d be comfortable with the no-new-revenue rate for the public notice, but that he doesn’t want to go higher than that. He added that advertising a higher rate ceiling could worry residents.
“We’ve had to raise taxes for the last couple of years, and none of us like to do that stuff,” Ross said.
On the other hand, council member Brittney Garcia-Dumas said she’d be willing to set the ceiling for the rate higher to allow residents to weigh in.
“I know that we don’t want to panic people, but we want to give people the opportunity at our town halls to see what we could do,” Garcia-Dumas said.
Yelverton said that an adoption of the no-new-revenue rate would bring in roughly $2.2 million that staff had not added to the budget.
Residents could also see an increase in their water bill.
Under the budget, staff proposed raising Arlington’s water usage rate charges between 4.7% and 7.8%, depending on how much water is being used.
Though the rates may rise, the city would still rank lower than nearby cities.
Yelverton said that other fees could be created or increased to a market rate in the future, which will require council approval.
“We are going to ask you to consider a fee recovery policy before we adopt the budget,” Yelverton told council members. “We had everybody go back through every lawfully allowed fee and (ask), are we charging it and are we at a market level?”
In 2025, the city’s planning and development services department worked through a phased overhaul of Arlington’s fee schedule. The process saw fees for special events, building inspections and more added or increased.
Spending and revenue
The Arlington police and fire departments are still the largest spending items in the city by far.
City staff also brought forward some items cut during the 2026 budget process to restore in the upcoming budget year.
Library collection budget: $100,000
Animal shelter hours: $66,253
Annual employee picnic: $12,000
Staff also brought forward new projects for funding in 2027.
Police fleet expansion: $1.1 million
Parks maintenance increases plus a new senior landscape technician: $303,987
Police motorcycle officer stipend increase: $40,344
Enterprise IT projects: $4.6 million
Yelverton said the initial proposal leaves plenty of projects on the table.
“There’s a lot of organizational things that need to be done that we will manage through, but it’s not through this process unless you all kind of tell me you want to do something different,” Yelverton told the council.
What projects were tabled under the initial budget proposal?
A 24/7 expansion of the city’s Real Time Crime Center
Replacements of police officer gas masks
Replacements of fire bunker gear
Expanded homelessness services
Additional city employee compensation increases
Additional street maintenance
Additional facility maintenance
Additional replacement vehicles
Additional funding for risk-self insurance or workers’ comp funds
Chris Moss is a reporter for the Arlington Report. Contact him at chris.moss@arlingtonreport.org.
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