Marquette managers present preliminary 2026 budget, warn of infrastructure backlogs and modest utility rate increases

City Manager Karen Kovacs presented the Marquette City Commission with a preliminary 2026 budget and a multiyear financial outlook on Aug. 7, urging cautious use of reserves while recommending targeted investment in roads and infrastructure.

The proposal shows the general fund is balanced for fiscal 2024 after staff and commission actions in recent years but would run a gap if all department requests are approved. "These are preliminary numbers," Kovacs said, "and they will change," adding that staff is recommending priority cuts and alternative funding for discretionary requests.

Why this matters: the city depends heavily on property tax revenue (about $15 million to the general fund) and payment-in-lieu-of-tax (PILT) arrangements, which together represent most unrestricted local revenue. City leaders said constraints tied to Michigan law and large nontaxable land holdings limit local options for raising revenue.

Key figures and recommendations

- Fiscal context: staff reported fiscal-year 2024 general-fund revenues of about $24.9 million and expenditures about $24.4 million, with a year-end fund balance around $8.8 million. Kovacs told the commission that the current preliminary 2026 requests, if all funded, would create a roughly $1 million gap and require using fund balance.

- Fund-balance proposal: staff…