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Caldwell workshop debates property‑tax constraints, fund‑balance uses and ballot options as city finalizes FY26 budget
Summary
City staff briefed council on how House Bill 389 and recent revenue patterns limit property‑tax room, outlined short‑ and long‑term revenue options (levy overrides, foregone, new fees), and proposed one‑time uses of excess fund balance including a potential city building fund and a property‑tax rebate program.
Raelynn, a member of the city's finance staff, told the council at a budget workshop that House Bill 389 materially changed how Caldwell can grow property‑tax revenue and that the law's mechanics have a compounding effect on the city's long‑term levy capacity.
"House Bill 389 did a lot of things to change how property tax was calculated," Raelynn said in the workshop, explaining the bill affected the preliminary levy rate, new‑construction recognition and imposed an 8% cap that limits the city's ability to increase tax revenue from growth.
Why it matters: Council members were presented with a projected preliminary property‑tax budget and options to address a revenue gap in public safety budgets. Staff described a roughly $1.6 million combined operating shortfall across police and fire (police about $1.0 million, fire about $600,000) for the coming fiscal year and explained short‑term and longer‑term tools the council could consider to close gaps.
Key numbers and constraints
Finance staff presented preliminary numbers and the allocations staff planned to make among departments. Staff said the…
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