Lancaster mayor unveils 2026 budget; council approves first standalone capital budget ordinance

Mayor Saracic introduced Lancaster City—s 2026 budget and the city—s first comprehensive capital plan at the Sept. 23 Lancaster City Council meeting, and council approved the capital-budget ordinance on final passage later in the legislative agenda.

Saracic told council the 2026 general fund projects $81.8 million in revenues and $81.7 million in expenses and that the administration is not proposing an increase in property taxes or the earned-income tax for 2026. "No property tax or earned income tax increase is proposed," Saracic said.

The nut of the administration—s message is the paired introduction of earlier budgeting under the Home Rule Charter and a stand-alone capital plan that covers the general fund and each utility. The mayor said Home Rule allowed the budget to be introduced earlier in the year, added a new controller role, and formalized financial policies such as a fund-balance policy, investment policy and debt policy.

Councilors commended the capital plan and the work of city staff. Councilor Arroyo and Councilor Ahmed each thanked Director Tina Campbell of accounting and Director Stephen Campbell of Public Works for assembling the capital plan and said they appreciated the planning and attention to limiting long-term budgetary impacts.

Key figures and changes cited by the mayor: - Projected 2026 general-fund revenues: $81.8 million; projected expenses: $81.7 million. - An 11% projected increase in earned-income-tax revenues for 2026 tied to last year—s adjustment in the earned-income tax. - A projected 6% increase in expenses (driven in part by health insurance and restored or filled positions) versus a target of 4%. - A reallocation of about $360,000 from enterprise utilities to the general fund, primarily affecting Public Works positions whose costs are split across funds. - An anticipated additional general-fund contribution of $1.0 million for 2026, producing a fund-balance contribution of $3.7 million and increasing the fund-balance ratio from about 17% to 22% (the administration said that aligns with the fund-balance policy under review). - A one-time, outlier $7.8 million in building-permit revenue tied to the Carissa project (260 Greenfield Road) that the administration will treat outside regular revenues and present in a separate report.

On utilities, Saracic said there are no proposed rate increases for inside-city trash and recycling, stormwater, sewer or water customers in 2026. He added the city will file a rate case next week with the Pennsylvania Public Utility Commission to raise water rates for outside-city customers; the administration expects those rates to take effect in mid-2026.

Council then considered and approved Administration Bill 7-2025, a capital-budget ordinance that the administration said provides for necessary equipment and infrastructure investments across city facilities and utilities. The ordinance passed on final reading with the following recorded votes: Mr. Mitt — yes; Mr. Royal — yes; Mr. Cleese — yes; Miss Craig — yes; Miss Diaz — yes; President Baker — yes. (Motion and second were made; no recorded no votes or abstentions.)

The mayor said additional budget materials and a detailed line-item capital plan will be available to council and the public at the Oct. 6 committee meeting and during department presentations scheduled later in October and November.

The council and mayor framed the package as part of a broader move toward stronger fiscal controls after adoption of the Home Rule Charter and a multi-year effort to eliminate a structural deficit. Saracic closed by thanking staff, particularly the accounting team under Director Tina Campbell, for preparing the earlier-than-usual budget.

Looking ahead, council will review the line-item budget and capital plan in committee on Oct. 6 and hear department budget presentations on Oct. 21 and Nov. 18 before further approvals.