Arlington homeowners could see their property tax bill go up by an average of $12.28 a month in 2026 as the city council considers raising tax rates to close a projected $25 million budget deficit.
Increasing the property tax rate by 3 cents per $100 of property value would provide the city with more than $11 million in revenue next year, City Manager Trey Yelverton told the council during a Tuesday afternoon work session.
The city council has not held any votes on the tax rate and Yelverton said the city is planning a town hall to discuss the possible increase before asking the council to make a decision.
Arlington's budget woes come after an unprecedented number of successful property value protests and the decision by the Tarrant Appraisal District to delay home value assessments until 2027.
“We had some things happen to us that could not be foreseen, but we have some things we can foresee and predict and plan for," Yelverton told the council Tuesday.
Current proposals given an unofficial nod of approval from council have slashed the projected shortfall to $6.41 million. They include closing city buildings, eliminating city jobs, cuts to programs and partnerships and new or increased fees.
Those cuts would not become official until the council approves them in the 2026 budget.
The $11 million in increased tax revenue would allow the city to balance the 2026 budget and provide funding to bridge the gap officials expect in 2027 as a result of changes to commercial property tax.
“There were some proposed pathways such as don’t do a raise, eliminate some employee benefits, eliminate some further positions, so with doing the tax adjustment it would eliminate those alternatives as future considerations,” Yelverton told KERA News Tuesday.
Those proposals were strongly opposed by Arlington’s police and fire associations, which warned those pathways could led to attrition and difficulty hiring.
Brett Worman, president of the Arlington Municipal Patrolman’s Association, said it would worsen a trend of officers leaving the police department.
“From my perspective and kind of seeing the ebbs and flows over the last 26 years, I think the things that they're talking about taking away from a benefit perspective would lead to more of something closer toward a hemorrhage,” Worman told KERA News Aug. 1, before Yelverton offered a tax rate increase as an option.
It would also avoid cuts impacting employees and reductions to property tax discounts like homestead and senior freeze exemptions, two ways the city could build its revenue without raising the actual tax rate.
Yelverton told the council during a Tuesday afternoon work session that the city cannot legally operate on a budget that includes a deficit, meaning the chasm in funding has to be closed before the budget is passed.
The city lowered the property tax rate every year from 2017 until 2025, when the rate went up by 1 cent from 2024. Raising taxes is the only option left for the city that does not include reducing funding for services or cutting employee benefits and compensation.
The increase would cover the budgetary needs for 2026 with 2 cents of the increase and help cover some expected funding challenges in 2027, namely changes to commercial property taxes, with the additional cent of tax revenue.
The city would still eliminate 22 positions, but would be able to delay the actual termination of those employees for 14 months. That number of positions is down from 40 in June.
"If you were going to solve the budget deficit with additional service reductions, it would roughly be equivalent of 40 more positions, about $4 million," Yelverton said. "There didn't seem to be a ton of interest in that."
Yelverton said the city could use what he called a “challenge grant,” money from the city’s reserve fund that could effectively give those employees a 14-month notice and allow them to find other jobs within the city or seek employment elsewhere.
Arlington would not be able to extend the challenge grant funding after those 14 months and would have to eliminate those positions at the end of that period.
Yelverton told the council Tuesday he anticipates all 22 employees would be able to transfer into other positions within that time, if they want.
The city would also merge its department managing the Arlington Esports Stadium into the parks and recreation department.
Yelverton said he needs to hear from the council by Aug. 12 to know what proposed tax rate they want him to take to their constituents at a town hall. The city is legally allowed to raise the rate by nearly 4 cents – an option none on the council seemed to favor.
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