Hagerstown council confronts $6 million FY2026 gap, weighs 5.5‑cent tax increase as events and state law changes complicate balance

HAGERSTOWN, Md. — City staff and council members said at a May 6 work session that the proposed FY2026 general fund budget faces roughly a $6 million shortfall and that, absent additional growth or cuts, the gap would require a roughly 5.5‑cent property tax increase — an amount council members and staff estimated would add about $110 to the annual tax bill for the average homeowner.

The shortfall was driven by higher health insurance costs, wage and pension increases in public safety, and lower one‑time capital funding, officials said. Councilmember Alshar, who led the budget breakdown during the session, said “that means about $110 more on my taxes next year.”

Why this matters: The general fund covers most city operations, and officials said property tax revenue makes up a majority of general fund income. Council members said public safety, parks and events, and capital projects are central to the city’s service level and political priorities, forcing tradeoffs between recurring costs and one‑time spending.

City staff and councilors described the budget math and options. Councilmember Alshar outlined the major drivers: roughly $1.5 million added for rising employee health premiums; roughly $3.8 million in agreed base‑wage increases concentrated in police and fire; about a 14% increase in pension costs for police and fire; and a drop in the capital improvement program from about $30 million last year to roughly $14 million in the proposed FY2026 plan. He said the city planned to use about $4.1 million in one‑time sources this year (bond proceeds and fund balance) to moderate the tax rate impact.

“Roughly, we’re getting $2,000,000 in growth. We’re getting about $2,000,000 in changes and assessments. And so we’re short about…