Arlington faces an expected budget gap of $21.5 million by 2026 and city leaders are scrambling to find ways to adjust the budget to reflect that shortfall, City Manager Trey Yelverton told the city council.
Yelverton told the city council at a meeting Tuesday afternoon that budget woes are due in large part to changes in the Tarrant Appraisal District that include a decision not to reappraise homes until January 2027.
That decision, paired with the successful protests and lawsuits contesting TAD valuations of property, have seen the city’s potential property tax revenue drop, Yelverton told the council.
The expiration of some grants that have helped fund city services will exacerbate the problems, but new grants and spending cuts could help soften the impacts to the city’s coffers.
Data that Yelverton presented to the council Tuesday showed how protests over taxable home value in Arlington have risen drastically each year since 2023.
He expects 2025 to end with a $5 million to $7 million shortfall in property tax revenues.
Yelverton said the budget gap next year is impacted by losses since the 2024 fiscal year, during which the city saw protests and lawsuits end in around $1 billion in property value decreases and a $7 million shortfall in property tax income as a result.
With no reevaluations coming until 2027, Yelverton said the city anticipates around $15.5 million in predicted property tax income will be lost. That could have a major impact on city services, staffing and other expenditures in Arlington.
What’s being done
The city is already looking at the least painful places to make cuts in the budget, Yelverton said. The goal is to reduce spending while limiting the noticeable impact on city services.
Arlington residents and businesses will still see reductions in city services, though.
The city manager told council members that after accounting for planned expenditures on police, fire department and streets, the city will only have around $30 million left to run the city.
“Some things that we’re doing really good work in, we’re not going to be able to do because we have to match what we’re doing with the revenues we’re going to pull in,” Yelverton said. “We’re going to need to have good, honest conversations about which areas of work are not as essential.”
He said the cuts will come to departments in the city that are doing great work but aren’t absolutely necessary. Some of those cuts are already being explored for the current 2025 budget.
The city is looking into which departments to cut, as well as looking at how existing and new grants could help balance the budget.
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