Columbia council hears FY2026 budget, adopts lower property tax rate; general fund shows $3.5M projected deficit

The Columbia City Council on Aug. 18 opened a public hearing on the city's proposed fiscal year 2026 budget and adopted the ordinance setting the 2025 property tax rate. Council members were presented with a budget showing $558 million in total operating revenue, $539 million in operating expenditures and $59 million in capital-improvement projects, with a projected general-fund deficit of about $3.5 million for FY2026.

Why it matters: The budget frames city services and staffing for the year that begins Oct. 1. Council and staff said a major driver of the gap is personnel costs tied to recent wage adjustments intended to improve recruitment and retention; staff stressed the city still expects to finish the year above the required reserve.

Budget overview and timing City staff presented the proposed FY2026 operating revenue of about $558 million and total expenditures including capital projects of about $598 million. The proposed general fund shows roughly $132 million in revenue and $136 million in expenditures, producing the roughly $3.5 million shortfall staff identified. The city manager and finance staff told the council the shortfall reflects ongoing personnel commitments and several one-time decision items (including public-safety equipment and a retail feasibility study) that were included in the proposal.

Staff noted that a portion of recent personnel increases were driven by a multi-year classification and compensation effort; for general employees the budget includes step and market adjustments that staff summarized as a combined 3.5% increase in the year (2% in the fiscal-year budget plus a 1.5% adjustment in January). City staff said they will continue to refine projections before final votes this fall.

Council and public reaction Multiple members of the public and several council-appointed commissions urged caution. Stacy Ford, chair of the Human Service Commission, thanked the council that the manager's proposed budget does not cut social-services funding and urged continued investment in social infrastructure. Diana Moxon, chair of the Commission on Cultural Affairs, asked the council to maintain arts funding amid possible federal cuts to the National Endowment for the Arts. Tom Rose, chair of the Housing and Community Development Commission, emphasized that many housing programs are grant-funded and reiterated the commission's priorities under the new five-year consolidated plan.

Several speakers urged the council to avoid ongoing deficit spending and to preserve reserves. A citizen commenter said, "if you've got ongoing commitments, you're not going to fix that until you fix your revenue problem," and another called the council's choice to deficit-spend a "poor decision." Council members pressed staff for details on the reserve level; staff estimated the city will have about $9-$10 million above the required reserve before accounting for the proposed FY2026 deficit.

Property tax rate Council bill 18225, the ordinance fixing the property tax rate for calendar year 2025, was presented at public hearing and adopted on second reading. Staff clarified the item was a property-tax ordinance (not a sales-tax action) and said the adopted rate is lower than last year due to the Hancock Amendment's limit on revenue growth tied to the lesser of CPI or 5% when assessed valuation growth exceeds allowable limits.

Next steps Council left the FY2026 public hearing open; further discussion is scheduled for the Sept. 2 council meeting with final action expected Sept. 15. Staff said they will provide updated revenue and reserve projections at future meetings to narrow the gap and show options to balance the budget.

Ending note: The council repeatedly emphasized the budget is a work in progress; with public hearings continuing in September, council members and community groups expect additional adjustments and analysis before final adoption.