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City staff lays out 2026 budget process; council discusses levy, tax rate and fiscal-disparities risks
Summary
Staff presented the timeline and choices for the 2026 budget, emphasizing levy, tax-rate tradeoffs, the impact of new tax capacity and fiscal-disparities exposure; council members identified priorities including keeping the tax rate flat and planning for long-term transportation and parks projects.
City staff briefed Dayton City Council on May 27 on the 2026 budget timeline and key policy choices, and council members offered priorities to guide staff work for the coming year.
Staff described the budget calendar, saying the process begins with departmental requests in April/May, preliminary council discussions in June, a long-term plan and one-page project summaries in July, workshops in August and adoption of the preliminary levy in September followed by final adoption in December. Staff recommended fewer workshops and earlier clarity of council priorities to reduce "budget fatigue." Staff summarized fund structure, explaining that the 100s are the general funds (mostly property-tax supported), 200s are special-revenue funds, 300s are debt-service and 600s are utility funds supported by user fees.
On revenue outlook and growth, staff noted new tax capacity numbers: "If you used all...8.1% of tax levy increase equals 8.1% of tax capacity means the tax rate stays the same." Staff also warned of the city's vulnerability to fiscal-disparities shifts and TIF timing: "We will be a loser this year," and added that prior years produced both winners and losers under the regional fiscal-disparities formula; staff estimated last year's fiscal-disparities hit at roughly "$800,000" in the meeting discussion.
Council members voiced priorities. One councilmember said, "My gut instinct is I want to keep the tax rate the same or maybe a little tiny bit lower." Other topics raised as budget priorities included: - pavement management and the possibility of pulling forward East French Lake Road work if favorable bid prices appear; - discussion of a potential future fire station and the timing for that capital need; - advancing long-term transportation planning and potential river-trail connections that could affect parks and economic development; - distinguishing one-time/nonrecurring costs from ongoing obligations such as union contracts and health insurance.
Staff asked council whether their budget focus should be on the tax rate, the levy or both, and what 5- to 10-year goals the council wanted to prioritize. Staff offered to provide more detail on capacity numbers, nonrecurring spending in prior years, union-contract cost projections and TIF schedules. Council members asked staff to return with those clarifying data during the budget process.
No formal levy or rate decision occurred at the meeting; staff will carry council guidance into the June and July budget workshops.
