Biloxi council reviews proposed FY2025–26 budget, grapples with $4–5 million gap and millage confusion

The Biloxi City Council held a public budget workshop and hearing to review the proposed fiscal year budget beginning Oct. 1 and ending Sept. 30, 2026, and to answer questions from council members and staff. The presentation showed roughly $75 million to $76 million in projected general fund revenue against roughly $84.3 million in total expenditures, producing a shortfall that councilors described as roughly $4 million to $5 million and that the city proposes to cover with reserve balances and other actions.

Why it matters: the council must set a balanced operating budget before the fiscal year begins while preserving reserves to pay bills and maintain services; councilors pressed staff about how revenue estimates and one-time sources interact with recurring expenses such as salaries and equipment financing.

City finance staff told the council the projected beginning general fund cash balance is about $13.5 million and that the projected ending cash balance for the coming year is a little over $500,000. “We are expecting the year to begin with 13 and a half million,” said Diane (Staff member). That figure is the baseline staff used when reconciling revenues and expenditures.

Council members and staff repeatedly discussed a prior working draft that included revenue from a proposed 3-mill property tax increase. Councilman Marshall said he had understood the budget before the council included $2 million in revenue tied to the 3-mill proposal and that backing that assumed revenue out expanded the shortfall. “The budget you presented to this council already included $2,000,000 in revenue anticipated from a tax millage that we had never invoked that we've never voted on,” Marshall said during the hearing.

Council leadership and staff characterized the version that included the 3-mill estimate as a working draft used during internal workshops. Council President (Staff member) said the working budget had repeatedly been revised department by department and that the millage projection was never a final adopted assumption. “That was a working budget. I really wasn't concentrated on that number. I was concentrating on the ending fund balance and what cuts that we needed to make to arrive at a useful ending fund balance,” the council president said.

Staff walked the council through major line items and a recent round of reductions. Departmental expenditures were shown at about $82.3 million and nondepartmental items and contractual items made up the remainder, placing total outlays at about $84.3 million. The presentation listed capital equipment and multi-year assets among the drivers of higher costs, including police vehicles and fire apparatuses. Staff noted the city had previously implemented multi-year pay increases for employees, and that equipment replacement and other one-time costs contributed to the higher expense total.

Several councilors asked whether layoffs would be necessary if the budget as proposed did not pass; staff responded that there was no immediate threat of layoffs tied to the workshop numbers. The council also discussed how vacancies have historically been budgeted (positions included in the budget even though many go unfilled), which inflates the expense side on paper while unspent salary appropriations roll into fund balance at year-end.

The hearing provided no public comments on the budget. With questions answered and further clarifications promised, councilors agreed to continue work on the proposal before final adoption and to consider potential amendments if additional one-time revenues or asset sales materialize.

Next steps: staff and councilors said they will continue refining revenue and expenditure estimates before the final budget vote and may bring budget amendments later in the fiscal year if one-time proceeds become available.