Hagerstown leaders outline FY2026 budget proposal including 5.5¢ tax-rate adjustment and $1.08 million for Invest Hagerstown
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Summary
City staff presented the proposed fiscal 2026 general fund and related special-revenue spending, explaining a 5.5-cent tax-rate increase would generate about $2.2 million and that most of the rise would fund public safety and personnel costs; the city also budgets a $1.08 million transfer to Invest Hagerstown for redevelopment incentives.
Hagerstown City staff and council members discussed the proposed FY2026 budget during the May 13 work session, saying the recommended 5.5-cent property tax-rate increase would generate roughly $2.2 million and that about $0.7 of every additional dollar per average homeowner would pay for public safety and personnel costs.
The budget memo showed the city expects a roughly $2.1 million uptick from assessment growth and $2.0 million from development growth, leaving a roughly $2.2 million “gap” that the 5.5-cent increase is designed to cover. Finance staff and a council member presented a line-item breakdown showing where the additional revenue would be spent, with the largest single categories being police and other public-safety costs.
Councilman Alshar asked staff for a simple, department-level plug‑and‑play worksheet to show how reductions would affect the 5.5‑cent increase. Staff distributed a table indicating the dollar impact on an average home assessed at about $200,000 (about $110 per year) and showing how small portions of that amount map to legal, finance, public safety and other line items. Michelle (identified in the session as a city staff member leading the budget review) said the chart is intended to help the public and council see concrete tradeoffs.
Council members and staff also reviewed related special fund budgets. The city’s Community Development Block Grant (CDBG) program — federally funded by HUD — remains tentatively budgeted at roughly the same entitlement level, but staff warned the final FY2026 CDBG award had not been announced and that public‑service allocations (capped by HUD at 15% of the entitlement) might change if the award differs from expectations. Staff explained that CDBG revenue includes loan repayments and interest from prior years, so the annual expenditure total can exceed a single-year entitlement.
Economic redevelopment funding is again proposed to receive a $1.08 million transfer from the general fund to support Invest Hagerstown incentive programs (city center redevelopment, citywide redevelopment, homeownership, rental rehabilitation and façade/sign grants). Economic development staff noted that if the council removed or reduced that transfer the saved dollars would remain in the general fund but would not be available for the incentive programs.
Staff said next steps include finalizing numbers for adoption at the regular session next week and called out that some line items (for example, personnel) are constrained by existing contracts and market‑driven material costs.
Council members asked for continued outreach and clearer public messaging about the tax change, noting the difference between a 5.5‑cent rate change and a percentage increase. Staff agreed to refine public materials and return with any adjustments required by final CDBG entitlement information.
