Budget director outlines $1.41 billion FY26 plan as revenues slow, pension and internal service costs rise

Budget Director Paul Payne on Wednesday presented the Board of Aldermen Budget Committee with a proposed Fiscal Year 2026 annual operating plan totaling about $1,410,000,000 and told members that slower revenue growth and large tax refunds in the current year required a cautious approach.

Payne said the general fund portion of the budget is $607,400,000 and that the package balances one-time items and ongoing pressures: “This increase is not because of underlying growth. What you’re seeing here is that this year we took a big hit…there was significant refunds and activity that we had this year,” he said, referring to earnings and payroll-tax refunds that materially reduced receipts in the current fiscal year.

The nut graf: the FY26 proposal incorporates one-time ARPA interest transfers, a smaller capital program than last year, creation of an internal service fund to capture police-related support costs, and modest underlying revenue growth assumptions as the committee and public weigh adjustments and potential amendments.

Payne walked the committee through revenues and expenditures in detail. He said earnings-tax receipts are estimated at about $232,300,000 in FY26 after unusually large refunds this year, and he used a conservative underlying-growth assumption of roughly 1.5 percent.…