Financial Look Back At 2023
The consistent growth in sales taxes , most of which are paid by visitors to Arlington , provided the opportunity to continue reducing the property tax burden on our residents .
The adopted budget for FY23 included a 2-cent reduction in the property tax rate , which was the seventh consecutive year in which the tax rate was reduced .
2-CENT REDUCTION in the Property Tax Rate
After two years of caution in preparing budgets that were constrained by the economic effects of the pandemic and uncertainty surrounding the City ’ s major revenues , the FY23 budget was prepared under circumstances that were far brighter than our most optimistic projections would have suggested at the outset . Challenges remained , but positive financial prospects allowed us to pursue new program initiatives and continue fulfilling the promises and commitments we made to our citizens .
The most encouraging aspect of the City ’ s revenue outlook continued to be the strong performance of sales taxes . After a sharp downturn in FY20 , the growth in sales tax revenue exceeded expectations . In FY21 , sales tax receipts in the General Fund were $ 73.8 million , an increase of $ 9.6 million ( 14.9 %) over the pandemic year of 2020 . Sales taxes continued to perform far better than anticipated in FY22 ; actual revenues were $ 84 million , which was $ 10.6 million ( 14.5 %) better than budget for the year .
The adopted rate for FY23 was $ 0.5998 per $ 100 of assessed value , 4.82 cents ( 7.4 %) lower than the $ 0.6480 rate in effect before the annual rate reductions began . Additionally , revenues related to the City ’ s booming entertainment district also continued to demonstrate strong performance in FY23 .
After revenues declined in FY20 and FY21 due to the COVID-19 pandemic , hotel occupancy tax ( HOT ) receipts returned to pre-pandemic levels in FY22 . In FY23 , HOT revenues reached $ 10,477,877 — an increase of $ 635,719 ( 6.5 %) over FY22 .
$ 10,477,877
HOT Revenues
The adopted budget for FY23 included an average 6 % compensation increase for City staff in October 2022 and an additional 2 % increase in April 2023 ; coupled with the 3 % increase provided in FY22 , these adjustments helped restore market competitiveness and redress the loss of purchasing power that resulted from a year of 9 % inflation .
Sales tax revenues returned to steadier growth patterns in FY23 . General Fund receipts on a budgetary basis were $ 88.4 million , which was $ 1.74 million ( 2 %) higher than budget and $ 4.51 million ( 5.4 %) higher than FY22 .
$ 88.4 MILLION Sales Tax Revenue
GENERAL FUND SALES TAXES REVENUES ( FY17-23 )
$ 100,000 $ 89,039
$ 90,000 $ 83,511
$ 80,000 $ 74,538
$ 70,000
$ 60,004 $ 62 , 598 $ 67 , 028 $ 63,762
$ 60,000 $ 50,000 $ 40,000 $ 30,000 $ 20,000 $ 10,000
$ 0 FY17 FY18 FY19 FY20 FY21 FY22 FY23