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City staff outline FY2026 general fund outlook; no general-property-tax increase recommended
Summary
City staff presented an initial FY2026 general fund forecast to the Board of Finance that proposes no general municipal property tax increase but anticipates a 6–7% municipal tax rate rise driven by dedicated taxes and other charter-authorized levies; the board discussed service inventories and cost-control measures.
City of Burlington staff presented a first look at the fiscal year 2026 general fund budget on Jan. 13 and told the Board of Finance they are not recommending a general municipal property tax increase on the town-meeting ballot.
Chief administrative officer Kathy Chen and staff outlined assumptions behind the draft: departments were asked to level-fund their budgets (which represents a real reduction after required cost-of-living and step increases), the city expects health-insurance costs to rise (staff estimated roughly 11%), and police and fire — which together represent a large share of the general fund — face contract negotiations this year that add uncertainty to cost projections. Chen said staff estimate an overall departmental increase of $5–6 million, and additional costs of about $2 million, leaving a projected gap of roughly $4.5 million after one-time funds and expected revenue are applied.
Chen told the board staff do not recommend a general-property-tax-rate increase; instead, the draft would use existing taxing capacity and dedicated taxes already authorized by charter. Staff said taxpayers should expect an overall municipal tax-rate increase of about 6–7%, a figure driven by the use of the final penny of the public-safety tax approved by voters last year, dedicated taxes for GMT, higher debt-service and retirement tax assessments allowed by charter, and an additional 1¢ proposed for the parks operating tax. Chen characterized some revenue in FY2026 as one-time (for example, a year when waterfront TIF debt service is no longer paid) and said staff will try to rely less on one-time ARPA funds going forward.
Board members pressed for specifics on charter authority for dedicated taxes and on how departments will realize level funding. One member asked whether the parks-tax increase authority is explicit in the charter; Chen said staff would provide a chart showing dedicated taxes and where authority is located in charter language. Board members also asked if level funding would come from eliminating vacancies or cutting positions; staff said departments identified a mix of options and that they had not proposed cutting incumbent positions as a primary approach.
Staff discussed a citywide service-inventory project intended to catalog every service each department provides, who receives it, frequency, statutory authority, costs and whether others provide the same service. Chen said the inventory will inform decisions about nonessential services that could be reduced to close the budget gap. Staff also said another set of initiatives under a "modern government" effort could produce $1–1.5 million in savings or new revenue. Chen said staff will return to the City Council Jan. 27 with additional detail on those efforts.
No formal vote was taken. The Board of Finance directed continued refinement of department budgets, follow-up on the service inventory and additional materials on dedicated taxes and budget impacts ahead of the March–June budget refinement cycle.
