Wilmington presents FY2026 revenue projections; reassessment leaves overall tax billing revenue-neutral

Rob Winkler, fiscal director in the Office of Management and Budget, told the Wilmington City Council Finance Committee that the administration’s FY2026 revenue projections fund a proposed general fund budget of about $204.2 million prior to transfers and do not rely on the tax stabilization reserve to balance operations.

Winkler said the projections assume no use of the tax stabilization reserve and that the mayor’s proposed budget—presented to council in March—includes no property tax rate increase but does include a proposed water/sewer rate increase of 6.5% and a 6% stormwater increase. He said Wilmington’s Economic and Financial Advisory Committee (WIFAC) reviewed and certified the projections on March 27 and that, by city code, council cannot change certified revenue projections without further WIFAC review.

Why it matters: Newcastle County completed a citywide reassessment — the county’s first total reassessment in about 40 years — and the county’s preliminary file shows a much larger assessed base. The administration is proposing a new millage rate intended to keep total billed tax revenue the same as FY2025, but the reassessment will move the distribution of tax burden among property owners. Council members asked for the final county file and for details on any assistance for households that face higher bills under the new assessments.

Wage and net‑profits taxes and property tax Winkler showed that wage and net profits taxes together are the city’s largest general‑fund revenue source, representing just over 41% of budgeted revenues. Wage tax alone was presented at about $75 million for FY2026 (Winkler said the wage tax rate is 1.25%). The FY2026 projection reflects reductions in refund claims seen in FY2025 and state economic council guidance: refunds that had reached roughly $3.9 million in the FY2025 budget are projected nearer $2.0 million, and the Delaware economic advisory projection of roughly 4.5% wage tax growth was used to add about $3.2 million to the forecast.

On property taxes, Winkler said county data to date shows a total assessed value for city property of roughly $13.3 billion (about $9.9 billion after exemptions) — about 4.6 times the old 1983 base. Because the assessment base is changing, the administration’s proposed FY2026 rate of 4.5577 mills (about $4.56 per $1,000 of assessed value) is intended to produce approximately the same total billed revenue as FY2025. He emphasized that “revenue neutral” at the city level does not mean individual bills will be unchanged: under the new assessments residential values rose faster (a factor of about 5.7) than commercial values (about 3.2), so some homeowners may see increases while some commercial accounts may see decreases. Winkler gave a median example: a median homeowner whose property is assessed at about $210,000 would see about a $216 annual increase under initial data and said final impacts depend on the final county file and appeals.

Water, sewer and stormwater Winkler gave a high‑level overview of the water/sewer fund: projected FY2026 revenues total roughly $100.6 million, up about $2.5 million from FY2025. He said base user revenues (consumption) are projected slightly down, but the budget includes a proposed 6.5% rate increase that adds roughly $3.8 million net of bad debt; for a typical inside‑city residential customer that was shown as about a $4.33 monthly increase. A 6% stormwater fee increase was shown to yield roughly $543,000 in additional revenue (about $0.33 per month for the average customer).

Other items and risks Winkler flagged several cross‑cutting risks and assumptions: the projections do not assume a recession in 2026, though he described the outlook as dynamic and noted federal actions could change inflation, growth and interest rates quickly. Interest earnings were shown falling from the recent elevated levels to about $5.2 million in FY2026, driven by lower investable cash balances after capital spending and by an expectation that rates will ease. On EMS, the budget includes a transfer of about $4.0 million to bring ambulance service in‑house and add 30 EMS positions; staff estimated initial EMS billing revenue could be conservative at $2.5 million in the first year while insurer certifications and collection delays are worked through (longer‑term collections might reach $3–4 million).

Council questions and next steps Council members pressed staff for the final county reassessment file and for the administration’s plan for any assistance to residents whose bills rise. Winkler and OMB staff said the county had extended the appeals deadline and that the final file was expected later in the month; they said the administration intends a revenue‑neutral city total and will supply follow‑up details on any assistance programs once the final data are available. WIFAC certification and the city charter’s timing requirements were cited as steps that shape the revenue timeline ahead of council’s required adoption of a balanced operating ordinance.

Lesser details and forward look Winkler provided line‑item movements (franchise fees flat, real estate transfer and head taxes showing modest increases, parking and red‑light revenues subject to equipment and collection variability) and said department budget hearings and further presentations (including a more detailed water/sewer presentation scheduled separately) will follow. He urged council to view the presented figures as a baseline, conservative projection subject to revision if the economic or reassessment data change.

Sources and attributions Statements attributed in this report come from Rob Winkler (Office of Management and Budget) and are supplemented by council members’ questions recorded during the April finance committee hearing.