County Manager Mark Schwartz has been directed to consider both program cuts and tax increases as he works to fill a fiscal 2026 budget gap currently estimated at $30 million to $40 million.
County Board members on Tuesday night (Dec. 17) voted unanimously to approve budget guidance providing Schwartz the ability to propose tax increases he deems necessary. That could include another increase to the real-estate tax rate.
Board member Takis Karantonis, who likely will be chairing the body next year, said an increase in the real-estate tax rate should be proposed only “if there is no other recourse.”
If one materializes, homeowners would see, for the second year in a row, a double-whammy: a higher tax rate ladled atop increasing real-estate assessments.
Arlington’s tax rate for homeowners in 2024 is $1.033 per $100 assessed valuation, an increase of 2 cents from 2023. Residents also pay a separate stormwater fee, based on the impermeable surface area of their lots.
Any increase in the tax rate would be in addition to many Arlington homeowners seeing higher assessments for 2025, as the local real-estate market has recorded ongoing appreciation over the past year.
The average sales price of residential properties sold in Arlington for the first 11 months of the year stood at $892,846, up 5.7% from the same period in 2023, according to figures reported by multiple-listing service Bright MLS, based on data from MarketStats by ShowingTime.
Those increases will play a major role in determining 2025 assessments, which will be released in late January. State law requires assessments to be based on 100% of fair market value.
For the owner of a home currently valued at $1 million, a 5% assessment increase coupled with a 2-cent jump in the real-estate tax rate would result in this year’s tax bill of $10,330 rising 7% to $11,057 in 2025.
For more than a half-century, the Arlington government has relied on tax revenue from the commercial sector to permit expansive government spending while keeping the burden on homeowners lower than it might otherwise have been. But with the freefall in some commercial-property values, more of the tax burden has been shifted to homeowners.
The budget guidance approved Dec. 17 calls on Schwartz to consider delaying capital projects and proposing reductions to or elimination of programs “that are no longer priorities.”
It also gave him a lengthy list of areas where spending should be prioritized: housing, mental health, homelessness, food assistance, child care, youth programs and commercial-resiliency efforts.
The guidance further directs Schwartz not to tinker with the existing revenue-sharing agreement between the county government and school system, and to incorporate full funding of agreements reached between the county government and its newly empowered employee unions.
Whether unionized employees ultimately will get what they bargained for will not be known until final budget adoption, as the same state law that in 2021 permitted the return of local-government unionization also made any agreements “subject to appropriation” by the governing body — and prohibited strikes by local-government workers.
The county’s operating budget, which first surpassed $1 billion in 2006, is $1.65 billion in the current fiscal year and under current budget projections could grow to $1.73 billion in fiscal 2026.
With the budget guidance now voted on, the ball moves into Schwartz’s court.
“We look forward to the proposed budget [in] February,” Karantonis said.
With the exception of two end-of-the-meeting housekeeping items, the vote on budget guidance was the last taken by Board Chair Libby Garvey after 12 years on the dais.
“I wish you all the very best with the budget next year,” said Garvey, who did not seek re-election. “It’s going to be a challenge.”
County Board adoption of the fiscal 2026 budget will come next spring. While the budget runs on a July-to-June calendar, the tax rate enacted by Board members will be for calendar year 2025.
