Senior Tax Freeze Impacts City’s General Fund Growth
Published on June 25, 2025
The City of Arlington is facing a challenging Fiscal Year 2026. Throughout the next several months, our “Piecing it Together” budget series will provide a high-level overview of the unique situational and economic factors impacting Arlington’s budget this year. Have a question or topic you’d like to see included? Send us a message.
In 2005, Arlington residents voted to approve the adoption of a senior tax freeze. That means for the past 20 years, the amount that Arlington homeowners ages 65 and up pay to the City on their annual property tax bill has been capped, even if the appraisal district increased their property assessment.
Why this matters: This savings, while beneficial for eligible Arlington homeowners, results in notably less property tax revenue for the City’s General Fund. The growing impact of the senior tax freeze, which removed $4.3 billion in taxable value from the City’s property tax base this year alone, is one of the challenges city leaders face as they work to balance a projected $25 million General Fund budget shortfall in Fiscal Year 2026. Other factors include the absorption of federal grants, slower property value growth overall, lower-than-expected sales tax receipts, and modified appraisal district processes.
How does the senior tax freeze affect the General Fund?
The General Fund, which is the largest fund in the City’s operating budget, supports core services including public safety, parks, libraries, and city administration. About three-fourths of the General Fund revenue comes from property and sales taxes.
The City is not removing the senior tax freeze. Unlike other tax relief measures the City Council approves annually, such as the 20% homestead exemption, the City cannot modify the voter-approved senior tax freeze. The budgetary impact of this specific tax relief is expected to continue growing as Arlington’s population ages. Currently, 14.3% of Arlington’s population is between the ages of 60 and 79.
As home values have increased and the population has aged over the past decade, Arlington has seen a 451% increase in the amount of assessed residential property tax value that is no longer taxable by the City because of the senior tax freeze.
What was $78 million in value removed from the rolls in FY15 now tops $4.3 billion in FY25. Removing that taxable value has real impacts to the General Fund. In FY15, the City did not collect $518,000 in residential property tax revenue that it could have if the senior tax freeze was not in place. Ten years later, that amount of lost revenue opportunity has risen to $3.5 million. To put that impact in context, $3.5 million is what it costs to pay the average salary and benefits for 26 patrol officers. It is also more than one-third of the Arlington Public Library’s annual budget.
The impact of the growing senior tax freeze, combined with other economic and situational challenges facing the City, will mean difficult decisions during the budgeting process. To make up for reduced revenues, the City Council is evaluating a lengthy list of proposed cost-savings measures and possible reductions in city services next fiscal year, which starts Oct. 1. Learn more at www.arlingtontx.gov/2026budget.