Kent County previews FY2026 draft budget; proposes income tax rise to fund middle school, $13M transfer to capital

Kent County staff presented a draft fiscal 2026 budget at a workshop, saying revenues are up about $3.2 million and describing a proposed income tax rate increase from 3.2% to 3.3% that staff said would be earmarked for a planned middle school project. The presentation also included a proposed $13 million transfer to capital projects and recommendations for a 5% salary increase for county employees.

The draft matters because staff said the county must balance recurring needs, one-time capital requirements and several state-mandated costs that will affect the county’s fund balance and future budgets. Presenters flagged state initiatives such as the Blueprint and the Time to Care Act as near-term fiscal challenges.

Budget presenter (Staff member) said the county’s projected revenue growth is “4.9, just under 5,” and that the budget shows $3.2 million in new dollars. “There’s no doubt in my mind if I go back and reproject off the 9 month numbers that will show a surplus,” the presenter said, describing an ongoing workstream to reproject revenues using nine months of data rather than the six months used earlier in the process. The presenter said property taxes account for roughly 56% of recurring revenue, income tax about 32%, other recurring 10% and nonrecurring about 2%.

On tax rates, the presenter told the group that "the property tax rate is gonna remain at, a dollar and 2.2¢ per hundred dollars of assessable base." The presenter also said that moving the income tax rate from 3.2% to 3.3% would generate roughly $255,000 that would be "earmarked for the middle school project." The presenter emphasized that much of the recent increase in residents’ bills is due to higher assessments rather than frequent rate increases.

The package includes one-time and recurring items. Staff described a $13 million transfer to capital projects and said they removed that transfer from the surplus/deficit line in the slide deck to avoid distorting recurring results. The presentation listed major capital priorities the county is tracking for longer-range funding: the middle school, public safety infrastructure, courthouse renovations and other state-mandated programs.

Staff walked through revenue components: a $2.251 million increase in property-tax collections reflecting a higher assessable base, $755,000 in higher income-tax receipts (of which $255,000 results from the proposed rate increase) and other smaller increases. The presenter said nonrecurring revenues include loan proceeds tied to capital leases and noted a net reduction in lease-proceeds revenue of about $247,000 because the county is planning 11 new vehicle leases in FY26 versus 15 the prior year.

On expenditures, staff said recurring spending is increasing by roughly $5 million and noted recurring budget lines increase by about $12.255 million (a figure that in the slides included the large one-time transfer until staff separated that item). Salary-related changes include two EMT positions, four public-safety positions and one public-works position and a proposed 5% general salary increase. The presenter attributed most of the growth in benefit costs to an 11% increase in employer pension costs and a roughly 14% increase in health-insurance costs on the county’s side.

Mandates and allocations also showed increases. Staff said mandated costs passed through to the county this year included increases tied to teachers’ pensions and state assessment changes; staff described some of those changes as passed along at about 50% of the originally discussed level. The presenter said the volunteer fire companies and the health-department rent increases were effectively beyond local control because they reflected external mandates or decisions.

Commissioners and staff asked for wording clarifications in the public slides (for example, labeling certain line items "vehicle lease proceeds" rather than generic "lease proceeds") and requested updates to slides that were still being finalized. The presenter said the capital-project figures were finalized only shortly before the workshop and promised to update and circulate the slides before the public hearing.

Other procedural and follow-up items discussed included reprojecting revenues using nine-month actuals, scheduling a site visit and follow-up discussion about Wharton Elementary, and a suggestion to place orders before June 1 for furniture tied to capital projects to avoid an announced vendor price increase. The presenter said the updated slide deck would be circulated to the group before the public hearing.

No formal vote was taken at the workshop. Staff characterized the session as a draft review and preparation for a public hearing and subsequent decisions.

Staff contact and next steps: staff will reproject revenues using nine-month figures, finalize capital project slides including the $13 million transfer, circulate the updated presentation to commissioners and present the draft budget at the scheduled public hearing for formal consideration.