Financial & Budget Information

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The Town of Arlington’s budget is a reflection of our community’s values, priorities, and goals. The Town has a long history of public involvement and oversight in the creation of annual Town budgets. Under the direction of the Town Manager, the Deputy Town Manager | Finance Director (DTMF), works with the Finance Committee, Capital Planning Committee, Community Preservation Act Committee, and financial departments to present the Budget to annual Town Meeting for approval in May. Town Meeting also approves the Arlington Public School and Minuteman High School budgets, both are presented by their respective Superintendent of Schools. Each budget is outlined below.

Arlington’s fiscal year is July 1st – June 30th.

The annual operating and capital budgets are submitted as part of the Town Manager’s Annual Budget & Financial Plan, which is publicly available prior to Town Meeting (April). Leading up to its publication and Town Meeting, the Finance Committee reviews the annual budget, the Capital Planning Committee reviews the capital budget, and the Community Preservation Act (CPA) Committee reviews the CPA budget and funding. Each Committee compiles a report with recommendations and submits it to Town Meeting. Town Meeting then adopts the operating budget, capital budget, and CPA appropriations for the following fiscal year. These budgets are all prepared in alignment with the Town’s Long Range Plan, which forecasts revenues and expenditures for the next 5 years. The Long Range Plan is used to determine the timing and amount of operating overrides necessitated by the Town’s structural deficit.

During the fiscal year, budgetary transfers may be made with the approval of both the Select Board and the Finance Committee. Amendments to appropriations must be made by Town Meeting.

Chart that shows the checks and balances of the budget process.

FY26 Revenue and Expeditures Pie Chart for Town Manager's FY26 Plan

These pie charts show at a glance where the money comes from and how it is spent. Learn more in the Town Manager’s Budget and Financial Plan.

Arlington Budgets

Town Manager's Annual Budget and Financial Plan
This plan is forward looking. Arlington has had a long tradition of developing a performance-based budget that clearly defines departmental goals and objectives and includes detailed trend analysis and long-term projections. The annual operating and capital budgets are included. It is important to note that the financial and budgetary information presented in the Annual Budget & Financial Plan are projections and are subject to change prior to Town Meeting. in accordance with Section 32 of the Town Manager Act, the Town Manager must annually submit a budget to the Select Board on January 15th.

School Budgets
The Arlington Public Schools Budget is the largest departmental budget in the Town. The budget is funded at Annual Town Meeting at the same time as other Town departmental budgets. The Arlington Public Schools Budget is detailed and includes very specific school department information. As a result, it is available for review as a separate document as presented by the School Committee. View School budget information.

Minuteman High School Budget
The Minuteman High School budget process begins in October, with the Superintendent and the Business Manager working with the staff, the School Committee’s Finance Subcommittee, and the District Treasurer to prepare the annual budget. After a public hearing, usually held in January, the Minuteman High School Committee considers the proposed budget. Once the Committee approves the budget, it is submitted to District towns for their consideration. Per statute, a 2/3 vote of approval from the town is required for budget approval. View additional budget information, including audits, on their finance page.

Public Participation & Budget Oversight

Finance Committee Reports
The Finance Committee was established by vote of the Town over a century ago. The Finance Committee considers all articles in the warrant involving an appropriation of money. Consistent with the Committee's charge, the Finance Committee prepares a report to Town Meeting that contains detailed budgetary information and recommendations on specific Warrant Articles that require or request an appropriation of funds. View Finance Committee Reports to Town Meeting.

Capital Planning Committee Reports
In 1986 Town Meeting established the Capital Planning Committee to assist the Town Manager in preparing a multi-year capital plan. The Capital Planning Committee prepares a report to Town Meeting that contains detailed financial information relating to Arlington's multi-year Capital Improvement Program. View Capital Planning Committee Reports.

Community Preservation Act Committee
The Community Preservation Act Committee (CPAC), created in 2015, is tasked with evaluating Arlington's needs in the CPA project areas and making recommendations to Town Meeting on how CPA funding should be spent. The CPA receives approximately $2.4 million in annual revenue from a property tax surcharge (1.5% of the net tax levy) and distributions from the Massachusetts Community Preservation Trust Fund. These dedicated funds are for public investments in open space and outdoor recreational facilities, affordable housing, and historic preservation. The CPAC consults the Select Board, Finance Committee, and Capital Planning Committee through their warrant hearing cycle prior to Town Meeting. The CPA funds are disbursed and administered as a grant program. View the CPAC Reports to Town Meeting.

Long Range Planning Committee
The Long Range Planning Committee is an advisory group to the Town Manager that periodically reviews revenue and expenditure forecasts in the Town’s five-year Long Range Plan. Its members discuss the financial impacts of annual increases in Town Departments, the School Department, and other expenditure and revenue forecast assumptions. Its members track the balance and use of the Town’s Override Stabilization Fund and analyze the timing and size of possible future tax override votes. The membership includes representatives from the Select Board, Finance Committee, School Committee, Capital Planning Committee, the Town Manager, School Superintendent, Town Treasurer/Collector, Town Comptroller, Directior of Assessments, and other staff. The Committee was established in 2004 in preparation for an operating override that year. The Committee meets, as needed, when the budget is being developed each fall and winter. Long Range Plans are included in the Town Manager's Annual Budget and Financial Plan and may be found at the end of Section 1 of the Budget Message.

Annual Audits
The Town of Arlington annually contracts with a private Certified Public Accounting auditing firm for the purposes of auditing the Town's accounts and funds and preparing financial statements for all governmental activities. The audit is conducted in accordance with the applicable standards contained in the Government Auditing Standards, which is issued by the Comptroller General of the United States. View audited financial statements.

How Does Arlington Compare? Revenues & Expenses

Every year in the Town Manager’s Annual Budget & Financial Plan a set of comparable communities are included to measure Arlington’s ability to raise revenue and how it spends that revenue. The comparable communities include: Belmont, Brookline, Medford, Melrose, Milton, Natick, Needham, North Andover, Reading, Stoneham, Watertown, and Winchester.

These communities were selected by Town, School, and Union leadership. These communities were identified based on a number of factors including; population, 5 year average municipal growth factor, population per square mile, median income per capita, median income per household, single family median home value, average single family tax bill, total tax levy, excess capacity as a percentage of maximum levy, and residential valuation as a percentage of the total tax levy.

There are a number of factors that contribute to Arlington’s structural deficit – some common among all municipalities and some unique to Arlington. Some factors particular to Arlington include the fact that Arlington is a densely populated, fully built-out community (see Tables 1 and 2 below). Revenue from growth in the tax base ranks 13 among a group of 13 comparable communities (see Table 3), and remains under the state-wide average. Another indicator of the Town’s ability and opportunity to raise revenue is a measure developed by the Department of Revenue called Municipal Revenue Growth Factor (MRGF). It measures a community’s ability to raise revenue, taking into consideration a community’s tax levy limit, new growth, state aid, and local receipts. As one can see from Table 4, the state-wide average and average of the twelve other comparable communities’ MRGF is 4.20 and 4.81 respectively. Arlington’s is 3.59, below the comparable communities' and state averages.

Comparable charts showing how Arlington rates among 12 other communities.

Another factor affecting the Town’s financial structure is its tax base. The Town’s tax base is nearly all residential - the commercial/industrial sector makes up slightly less than 6% of the total. Table 5 shows that Arlington’s commercial/industrial tax base ranks 12th out of 13 comparable communities. The average of these communities is 16.18%, over three times that of Arlington. This affects not only the Town’s ability to raise revenue, it places a heavier tax burden on the residential sector as there is almost no commercial/industrial sector with which to potentially shift the tax burden. Notwithstanding this, the tax burden, when measured several different ways, is below the average of the 13 comparable communities. In fact, the Town ranks 7th in taxes per capita (Table 6), and 3rd in taxes per household as a percent of median household income (Table 7), both below the averages of the other 12 comparable communities. A look at how the Town’s spending levels impact the Town’s financial position shows that the Town’s spending per capita is well below the state average and the average of the 13 comparable communities. Arlington ranks 7th out of 13 comparable communities in overall expenditures per capita (see Table 8).

Comparable charts showing how Arlington ranks among 12 other communities.

The per capita spending average of the other comparable communities is approximately 9% greater than Arlington. With spending below average for comparable communities, and with revenue growth opportunities below the statewide and comparable communities average, it is clear that the structural problem with the Town’s finances lies with the revenue side of the equation as opposed to the spending side.

Mass.gov Municipal Finance Trend Dashboard

View key municipal fiscal health indicators compiled by mass.gov. Dashboard data is compiled from required municipal submissions to DLS, annual financial statements, state agency databases, and the US Census.

How Does Arlington Compare? Property Tax & Assessment Data

The Board of Assessors prepares the tax rate based on the assessed values of residential, commercial, industrial, and personal property throughout the Town on an annual basis. In late November or early December, the Select Board holds a tax classification hearing for the purposes of setting the tax rate. Excerpted here are 3 charts from the November 10, 2025 Tax Classification Hearing to set the FY26 Tax rate.

The first chart outlines how the levy is determined and what the new tax rate will be. The tax levy grows automatically by 2.5% each year per Proposition 2 ½, and then New Growth for that fiscal year is added, resulting in the new Levy Limit. New Growth is largely the result of construction activity and condo conversions in Town. This chart is followed by a comparison chart of average single-family taxes in our neighboring towns, and an overview of the valuation of property in Town by property class. This overview is a snapshot of tax contributions by the different property class types. CIP is used to refer to the combination of commercial, industrial and personal property taxpayers (CIP).

Table that shows Arlington's FY26 tax levy limit and how it got to the new tax rate of $10.67

Chart that compares avg single family home taxes of Arlington to its neighboring towns of Belmont, Winchester, and Lexington, showing over 6 years that Arlington's taxes is consistently lower than the other 3 towns.

Shifting the Tax Rate

Municipalities must set a Residential Factor when setting the tax rate. Historically, the Select Board in Arlington has voted to adopt a residential factor of “1”. Doing so results in the taxation of all classes of property at the same rate, or a single tax rate. Many other communities, including nearby cities like Boston, Cambridge, and Somerville adopt a split tax rate through a Residential Factor less than “1”. In doing so, these communities shift the tax burden more heavily onto commercial and industrial property owners to lower the tax burden placed on residential property owners. Due to the small percentage share the CIP classes contribute (5.2%) in Arlington, it is not feasible to make a meaningful impact on residential taxpayers without significant potential negative impact on the CIP class.

Break out of different tax classes and their values. Residential is at 94.7278% and Commercial is at 5.2722%

Borrowing and Benefits of AAA Rating

To be able to afford large capital projects, the Town borrows funds every year and budgets for the resulting debt service. The Town generally borrows for capital projects over $100,000 that do not recur annually. Because the Town has maintained a AAA bond rating, has received favorable interest rates, often below market rate. A sampling below.

February 5, 2025: $11,355,000 30-year general obligation bond issue. Fidelity Capital Markets was the winning bidder on the bonds again this year with an average interest rate of 3.539%. Bond proceeds will be used to finance various municipal purposes most notably, the Arlington High School Project.

November 29, 2023: $18,090,000 30-year general obligation bond issue. Fidelity Capital Markets was the winning bidder on the Bonds with an average interest rate of 3.69%. Bond proceeds will be used to finance various municipal purposes most notably, the Arlington High School Project, the Public Works Facility Project on Grove Street, and various other capital improvement plan projects.

December 1, 2022: $8,515,000 30-year general obligation bond issue and a $4,607,401 359-day bond anticipation note (BAN) issue. Janney Montgomery Scott LLC was the winning bidder on the Bonds with an average interest rate of 3.77%, and Fidelity Capital Markets was the winning bidder on the BAN with a net interest cost of 3.13%. Bond and BAN proceeds will be used to finance various municipal purposes most notably, the Public Works Facility Project on Grove Street.

February 3, 2022: $82,445,000 30-year general obligation bond issue. J.P. Morgan Securities was the winning bidder on the Bonds with an average interest rate of 2.416%. The Town received a total of 7 bids on the Bonds. Bond proceeds will be used to finance various municipal purposes including the new High School and the Public Works Facility Project.

February 18, 2021: $77,945,000 30-year general obligation bond issue and a $100,000 89-day bond anticipation note issue. Janney Montgomery Scott LLC was the winning bidder on the Bonds with an average interest rate of 1.77%, and Century Bank was the winning bidder on the Notes with a net interest cost of 0.55%. Bond and Note proceeds will be used to finance various municipal purposes.

November 13, 2019: $66,190,000 30-year general obligation bond issue. Morgan Stanley & Co., LLC was the winning bidder on the Bonds with an average interest rate of 2.69%. Bond proceeds will be used to finance various municipal purposes. The largest portion of this bond goes to fund the first phase of the new Arlington High School, with additional funds going toward the Community Center renovations (Senior Center), and other approved capital programs.