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City budget office outlines FY26 process and warns ARP one‑time funds are ending
Summary
At a March budget hearing, city budget staff reviewed the FY25 budget, explained the FY26 biennial schedule and said one‑time American Rescue Plan Act funds have largely expired, returning emphasis to structurally balanced general‑fund planning and tax‑base growth.
The Cincinnati Budget & Finance Committee heard an overview of city finances and the FY26 budget process from Dr. Dudes, the budget office presenter, on the committee’s third public budget hearing.
Dr. Dudes told the panel that the city is moving from a budget that relied in part on one‑time federal American Rescue Plan Act (ARP) dollars to a “structurally balanced” budget for future years, meaning recurring revenues must meet recurring expenses. He said: “Our goal is to pass a balanced budget every year. Specifically, now we will be looking at a structurally balanced budget.”
The presentation laid out five strategic priorities that guide department spending: public safety and health, growing economic opportunities, thriving neighborhoods, fiscal sustainability, and excellent and equitable service delivery. Dr. Dudes said departments and agencies in the approved FY25 document are assigned to one of those priorities on their summary pages.
On size and composition, the budget office said the city’s all‑funds operating budget for FY25 is just over $1.3 billion with an additional $620 million in capital, totaling about $1.9 billion. The general fund for the current fiscal year is approximately $570 million, with earnings tax the single largest revenue source followed by property tax and state shared revenues. City staff emphasized that public safety takes the largest share of general‑fund spending — roughly 32% for police and 27% for fire — and that personnel and benefits account for more than 80% of general‑fund expenditures.
Dr. Dudes reviewed the capital side, noting utilities (Metropolitan Sewer District and Water Works) are the largest capital drivers. The general capital program is roughly $105 million for FY25, with transportation and engineering receiving nearly one‑third of that general capital share for street rehabilitation, bridge maintenance, traffic signals, pedestrian safety and related projects.
The presenter also described $29.2 million received from the sale of the Cincinnati Southern Railway (the “Cinci on Track” funds) and said those funds are restricted to existing city infrastructure projects; transportation and engineering was the top recipient in the FY25 allocations.
On process and schedule, the budget office said it is simultaneously in two phases: outreach/education and policy development. The timeline calls for the recommended biennial budget document to be prepared by the budget office and released in May (by charter), the city manager to transmit the recommendation to the mayor, the mayor to propose any changes, and city council to deliberate and adopt a budget by June 30 so the new fiscal year can begin July 1. Dr. Dudes noted department presentations to the committee will start the following week, and a final public hearing on the recommended budget is scheduled for June 3.
Leverage support: Dr. Dudes summarized the city’s leverage support process (city financial support to external organizations). He said leverage support is for operating expenses (not capital), applications are online, typical requests should range from $50,000 to $500,000, and eligibility requires a demonstrated three‑year track record with audited financials or federal tax returns. For FY26 the categories for leverage support are arts; economic development and neighborhood support; environment; and equity and inclusion. He added that homelessness, eviction prevention, human services, violence prevention, workforce programming and poverty reduction were moved to the Human Services Fund (managed by United Way) rather than being part of the leverage support categories this year. Dr. Dudes said applications opened Feb. 17 and close March 23; final award recommendations will be included in the city manager’s recommended biennial budget released in late May and remain subject to council appropriation in June.
