Augusta city officials told the Augusta City Commission at an October budget session that the proposed 2026 general fund budget faces a projected $21 million gap driven by rising employee costs and the loss of one-time federal funding.

Administrator Allen told commissioners the city revised revenue projections after receiving the 2025 insurance premium tax payment, which was 14% higher than 2024 and allowed staff to project conservatively a 7.9% increase for the Fire Protection Fund. "We have revised that budget ... to include no mill increase for the fire protection or urban services, conservatively projecting a 7.9% increase for 2026," Administrator Allen said.

The administrator presented multiple revenue and expense drivers that together produce the $21 million shortfall. Key items cited include the loss of roughly $7.4 million in American Rescue Plan Act (ARPA) funds that had been used in prior years to balance budgets; higher projected health insurance costs; full-year costs for recently filled sheriff's office positions; and increased prisoner medical and operating costs at the Charles B. Webster detention facility.

City staff identified specific adjustments and proposals to address the gap. Finance recommended increasing the lapsed-salary (vacancy) estimate by $1.5 million — from $5 million to $6.5 million — to reflect recent hiring and vacancy trends. For law enforcement, the lapsed-salary estimate was reduced from $6.1 million to $3 million because the sheriff's office has filled many positions; administrators said that change is the single largest cost increase in the law enforcement fund for 2026.

Administrator Allen said the proposed budget includes a 3% cost-of-living adjustment (COLA) for 2026, carrying a projected cost of about $1.7 million for the general fund and $1.3 million for law enforcement. "I know it may seem counterintuitive to include an increase when we are actually facing a deficit, but I truly believe we need to start consistently building in a COLA to our base budget," Allen said.

Staff also outlined a recent state and local change raising the hotel-motel tax from 6% to 8% (approved by the Georgia General Assembly and a local ordinance change in 2025), with collections at the higher rate beginning Oct. 1. Preliminary estimates project roughly $1.3 million in new revenue for 2026; staff recommended allocating those funds to recreation capital projects such as the aquatic center and Diamond Lakes.

Administrator Allen summarized contingency scenarios for addressing the shortfall: a 2-mill increase would reduce pressure on cuts, while no millage increase would require significant departmental reductions. "If there is no millage increase ... [that] leaves us ... an 8.42% additional cut to all departments," Allen said, adding that some departments have already reported they cannot absorb the full 3% cut target. The presentation also showed the city's current position under the property tax cap and rollback rates used to compute these options.

Commissioners and staff discussed contract reviews, nongovernmental organization (NGO) funding reductions already proposed in the recommended budget (a 30% cut for discretionary agencies and 10% for certain nondiscretionary authorities), and possible targeted savings such as renegotiating multi‑year contracts totaling about $221,000. Administrator Allen said ARPA had been used for a mix of one‑time projects and recurring expenses in prior years, and those funds are not available for 2026; she listed ARPA allocations including roughly $22.4 million for general fund revenue replacement, $11.5 million for plan supplements (including raising certain wages to $15/hour), $6 million to offset health insurance, and $3.8 million for streetlight deficits.

Allen closed by noting follow-up work sessions scheduled to dive deeper into utilities, vegetation and grounds maintenance, and the detailed impacts of proposed cuts. "I look forward to us working together to continue to build the foundation," she said.

Ending: Commissioners directed staff to return with more detailed, line‑by‑line impact estimates and schedules of follow-up work sessions, including a Nov. 6 session to hear affected organizations and later meetings to review water‑rate proposals and the vegetation/grounds maintenance plan.