Arlington staff warns of $6.4 million budget gap as senior tax freeze, appraisal changes bite

City staff told the Arlington City Council on June 24 that the city faces a roughly $6.36 million budget gap for fiscal 2026 after a year of falling revenues and growing, irrevocable property-tax relief measures. The presentation by Trey (staff member) said the gap stems from three linked issues: the final year of American Rescue Plan Act (ARPA) funds, changes and protests at the appraisal district that reduced taxable values, and a voter-approved senior tax freeze that staff described as “eating our lunch.” The gap is the remaining, unidentified portion after months of reductions and restructuring. Staff reported roughly $2.3 million in unidentified recurring cash needs and argued that when a $4 million business-continuity reserve is considered the effective gap grows to about $6.36 million. Why it matters: the council must close that gap before adopting a balanced budget later this summer. Staff presented a package of revenue and cost options — from using reserves, cutting positions and freezing or reducing compensation increases to targeted changes in benefits and a portion of the tax rate — and asked the council for policy direction. Most important facts - Staff said ARPA funding is…