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Finance director reports clean 2024 audit, flags new sales‑tax bill for 2026 budgeting
Summary
The city's finance director told the council Arlington received a clean financial and federal compliance audit for 2024, said sales tax collections are down about 4% year over year and warned of a recent legislative bill that 'adds sales tax to items that weren't previously taxable,' which could affect the 2026 budget.
Paul, the city's finance director, presented the July and August financial report and told the council the city received 'a clean financial and federal compliance audit for 2024.' He said the auditor will return next month to complete the competency portion of the review.
On revenues, Paul said sales tax collections have been down overall but noted a small bump in August, describing the city as 'stable' but running about 4% below target year over year. He said the city is watching a recent legislative change closely: 'It adds sales tax to items that weren't previously taxable,' which will both increase costs for some city purchases and generate new tax revenue; Paul said the city has not yet received state estimates of the fiscal impact and will monitor effects for the 2026 budget.
Paul also reported the city’s reserve position is stronger than feared when the 2025–26 budget was built, with reserves near the upper end of the targeted 10–16% range at roughly 15.5%. He said the city will be conservative in 2026 budgeting while waiting for clearer revenue projections.
