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Portsmouth council adopts 2.9% FY26 budget guidance, asks manager for 0% impact analysis
Summary
The Portsmouth City Council voted 8–1 to direct the city manager to target a 2.9% increase in total expenditures for the FY26 budget and to report what a 0% increase would mean for services and staffing.
The Portsmouth City Council on Tuesday voted 8–1 to give the city manager guidance to target a 2.9% increase in total expenditures for the fiscal 2026 budget and to provide a scenario showing what a 0% increase would mean for public services and staffing.
The vote followed several hours of public comment and council debate about pressures on homeowners after a recent property revaluation and about negotiated pay steps and cost-of-living increases built into employee contracts. Councillor Charles Taber introduced the original motion and amended it to 2.9% after an unsuccessful effort to set a 0% target.
Councilors and staff said the guidance is meant to produce a conservative target for departmental budget submissions while preserving the council’s ability to evaluate trade-offs later in the process. Mayor McEachern and Assistant Mayor Kelly joined a majority that said a modest target aligned with recent COLA (cost-of-living adjustment) trends would avoid abrupt service cuts.
City staff explained that negotiated contracts and typical step increases mean payroll pressure alone tends to push overall spending roughly into the 4%–4.5% range; council discussion repeatedly cited a 10‑year average COLA of about 2.84% used in staff planning. Several councilors asked departments to consider unfilled positions and upcoming retirements as places to reduce costs without immediate layoffs.
The council also required that, when departments seek budgets that would reduce service levels, they provide detailed explanations and identify what would be cut. The motion explicitly directed the manager to prepare a “0% increase” scenario showing the specific service and staffing impacts if the council wanted to pursue that alternative.
Why it matters: More than half of Portsmouth homeowners experienced double‑digit tax increases from a recent revaluation, councilors said, and many residents are on fixed incomes. The guidance aims to limit additional tax pressure while giving the council data to evaluate options during the formal budget process.
What’s next: The city manager and finance staff will prepare departmental submissions under the 2.9% guidance and will produce the requested 0% impact analysis for council review during the budget season. The council will vote on the final FY26 budget later in the statutory cycle.
Votes: The final amended motion to target a 2.9% increase and request a 0% impact analysis passed 8–1. An earlier amendment to set a 0% target failed 3–6.
