Mayor Mitchell submits $561 million FY26 budget; council refers nine appropriation orders to committee

Mayor Jonathan F. Mitchell submitted the City of New Bedford's proposed fiscal year 2026 budget to the City Council and residents, saying the $561,000,000 spending plan ‘‘sustains services at levels our residents expect and deserve and avoids unduly burdening taxpayers.’’

Mitchell told the council the proposal comes amid a ‘‘relatively stable local economy’’ — with an unemployment rate around 5% — but warned that structural budget pressures limit the city's flexibility. He singled out rising school obligations, pension payments and employee health insurance as the primary drivers of cost increases and urged the state to increase unrestricted local aid.

The mayor said the proposed total budget is $561,000,000, with a general fund of $500,400,000. He attributed most of the year-over-year increase to legally mandated school funding, pension payments and health insurance costs, and said the proposed general fund budget would fund two fewer net employees than the current year. "We just can't afford it right now," he said.

Mitchell quantified several budget pressures and program details: he said the city's pension system is about 54.5% funded and projected that in roughly 10 years the city could be paying "$71,000,000 just in that 1 year" for pension obligations required by state law to be eliminated by 2035. He forecast health insurance costs for FY26 of $50,400,000, or about 10.1% of the general fund. He blamed a long-running shortfall in non-school local aid from the state and said, "Had the state kept up its local aid commitment ... we'd have approximately $14,000,000 more" in the current year; he added that the cumulative shortfall over the period he cited totals about $187,000,000.

Mitchell also summarized major capital and infrastructure projects referenced in the presentation, including a $300,000,000 reconstruction of the Route 195 viaduct, expansion projects at cultural institutions and port investments, and the resumption of intercity rail service to Boston. He noted federally mandated wastewater work under an Environmental Protection Agency administrative order and said the wastewater fund budget incorporates planned sewer-separation projects.

On employee health care, Mitchell urged the council to consider Sections 21–23 of the Municipal Healthcare Reform Act, saying most regional municipalities have adopted it and that it ‘‘levels the playing field’’ when health-care plan design cannot be agreed by unions and municipalities. He described the city's approach as ‘‘highly conservative’’ for FY26 and invited council questions and departmental review in upcoming budget hearings.

Votes at a glance

• Items 2–9 (appropriation orders for various municipal, enterprise and utility accounts, described below): Motion to refer items 2 through 9 to the Quasi Committee of the Whole. Motion made by Councilor Perra; seconded by Councilor Abreu. Chair called for the question; "Aye" votes carried the motion. Outcome: referred to the Quasi Committee of the Whole for detailed review.

The nine appropriation orders read into the record before the referral included: an order appropriating $460,838,400 from municipal receipts for FY26 current expenses (Item 2); an order appropriating $1,374,461 from airport receipts (Item 3); $129,600 from the hotel and lodging tax for Arts, Culture and Tourism (Item 4); $1,488,882 to the Cable Access Enterprise Fund (Item 5); $66,500 standing to the credit of CCDA traffic handicap parking with sub-allocations (Item 6); $1,113,112 to downtown parking (Item 7); $35,596,711 from wastewater receipts (Item 8); and $20,904,506 from water receipts (Item 9). The council took no final vote on those appropriations at the meeting; they were referred for committee consideration.

Procedural notes

After the mayor's presentation and the clerk's reading of items 2–9, Councilor Perra moved to refer all nine items to the Quasi Committee of the Whole; Councilor Abreu seconded. The chair put the question and the ayes carried. A subsequent motion to adjourn, made by Councilor Oliver and seconded by Councilor April, also carried and the meeting adjourned at 7:41 p.m.

What the budget covers and next steps

Mitchell said department heads proposed only items ‘‘necessary to provide our residents the service levels they expect,’’ including revenue-generating positions (for example, emergency medical technician hires) and positions intended to produce savings (for example, an in-house plumber). He emphasized that FY26 remains constrained by legal and contractual obligations that the city cannot unilaterally change — the mayor repeatedly noted that school funding levels are set by state formula (Chapter 70), pension funding schedules are set by state law, and employee health benefits require union agreement or, in some cases, statutory procedures for resolution.

Council review of departmental budgets and the referred appropriation orders is expected in upcoming meetings as the administration and council refine the proposed FY26 plan.