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County Manager proposes FY2026 operating budget with meals tax increase and $12M in service reductions
Summary
County Manager presented a $1.7 billion FY2026 proposed budget with a 2.2% increase over FY2025, a proposed increase in the meals tax from 4% to 5%, $12 million in service and program reductions affecting 45 positions, and a recommended boost to stabilization reserves; board will take final action April 9.
County Manager Charles Schwartz and Department of Management and Finance staff presented an overview of the Arlington County Manager’s proposed FY2026 operating budget during the public hearing on Tuesday.
Budget staff summarized the manager’s proposed operating budget at roughly $1.7 billion in general fund operations and related funds — a 2.2% increase from the adopted FY2025 budget. The Manager’s proposal assumes 2% growth in real estate assessments from the January reassessment and forecasts 3.6% overall tax growth in FY2026, while proposing a single tax rate change: raising the county meals tax from 4% to 5%. The budget also includes a number of fee proposals.
Manager Stevenson (management and finance) told the board that revenues, even with assessment growth and proposed tax/fee changes, do not fully cover projected needs. The proposal therefore recommends more than $12 million in service and program reductions that would impact 45 positions across county government. The county manager also recommends increasing the county's stabilization reserves to provide flexibility amid federal funding uncertainty.
Arlington Public Schools would receive more than $647 million in county support under the manager's proposal, about 46.8% of local tax revenue and a 3.6% increase in ongoing funding compared with FY2025. The FY2026 fiscal year would begin July 1, 2025.
The County Board opened the public hearing on the expenditure budget Tuesday; the board scheduled a separate public hearing on proposed tax rates, fee changes and code amendments for Thursday, March 27 at 7 p.m. The board expects to adopt a final budget on April 9. At the close of the public hearing, the board voted to close the hearing and carry the item over to the April 9 meeting.
The motion to close the public hearing was moved by Board Chair Takis Karantoynis, seconded by Vice Chair Matt Ferrante, and the board's vote was recorded as unanimous in favor.
