At the May 4 Board of Mayor and Aldermen meeting, Town staff presented the proposed budget for Fiscal Year 2026–2027, which begins July 1, 2026.
The Board approved the first reading of the budget. A public hearing and final reading are scheduled for June 1 before the budget is officially adopted.
Key Highlights from the Proposed Budget
No Property Tax Increase Proposed - The proposed budget keeps Arlington’s property tax rate unchanged at $1.13 per $100 of assessed value.
The total proposed General Fund budget is approximately $19.2 million.
Town staff reduced initial departmental funding requests by about $1.5 million in order to present a balanced budget while maintaining Town services and avoiding a tax increase.
Where Town Revenue Comes From - The Town’s primary sources of revenue continue to be:
Property taxes
Local sales taxes
State shared taxes
Growth in local sales tax revenue continues to help support Town operations and reduce reliance on property taxes over time. Property values also increased across several categories (real, personal, and state-assessed property), contributing to overall revenue growth.
Major Budget Priorities - The proposed budget focuses on maintaining daily Town operations while continuing investments in:
Public safety and services
Street and infrastructure improvements
Equipment and capital needs
A significant portion of the budget also includes transfers to support areas such as street maintenance/improvements and solid waste and landfill obligations.
Town staff noted that Arlington’s debt service remains low at approximately 3%, reflecting long-term conservative financial management.
Street & Infrastructure Improvements - The proposed State Street Aid budget includes approximately $1.8 million for:
Street repairs and maintenance
Sidewalk maintenance and improvements
Ongoing infrastructure upkeep
Major projects, including:
Donelson Farms Parkway
Airline Road and Arlington Trail improvements
Future I-40 interchange-related improvements
The Town is also continuing efforts to rebuild reserves following prior large-scale infrastructure investments, including street lighting replacement projects.
Solid Waste & Sewer Funds Remain Stable - Both the Solid Waste and Sewer Funds continue to operate as self-supporting enterprise funds, funded primarily through user fees.
Solid Waste Fund
Expected to maintain a small surplus
Additional revenue is largely tied to interest earnings
No overcharging was identified
Sewer Fund
Includes required depreciation expenses
Maintains a positive contribution to reserves
These funds are designed to operate independently while minimizing impact on the Town’s General Fund.
Strong Fund Balance Maintained - The proposed budget projects an undesignated General Fund balance of approximately $17.1 million. The Town remains compliant with its financial policy requiring reserves equal to at least 75% of annual revenues.
Town officials stated that maintaining strong reserves helps provide:
Stability during economic uncertainty
Emergency preparedness
Flexibility for future capital projects and infrastructure needs
Long-Term Capital Planning - Staff also presented a multi-year capital improvement plan that outlines future:
Equipment purchases
Facility needs
Infrastructure projects
Long-term maintenance planning
This planning process helps the Town prepare for continued growth while maintaining existing service levels.
What Happens Next? The proposed budget will return to the Board of Mayor and Aldermen on June 1, 2026 for:
A public hearing
Second and final reading of the budget
Incorporation of the Arlington Community Schools budget prior to adoption
Residents are encouraged to attend the public hearing or follow updates through the Town’s official communication channels.