Portsmouth council provisionally approves $77.2 million FY26 revenue plan, sets tax rate increase at 1.49%

Portsmouth Town Council provisionally approved the revenue portion of the town administrator27s proposed fiscal year 2026 budget on April 28, voting 7-0 to advance a $77,199,531 plan that includes a proposed residential and commercial tax rate of $13.3708 per $1,000 in assessed value, a 1.49% increase over the current rate.

The proposal, presented by Town Administrator Rich Reyna, lays out a balanced general-fund budget of about $77.2 million, a 3.76% increase over the prior year, and projects the town will remain roughly $1,033,022 below the state27s statutory levy cap. "We are proposing a balanced $77,200,000 general fund budget," Reyna said during the presentation.

Councilors pressed for more granular revenue forecasting on several lines. Questions centered on the town27s interest-income assumptions, recreation-program revenues and a misallocated line for Prudence Island transfer-station stickers that will be corrected and reflected in upcoming enterprise-fund accounting.

Nut graf: The vote advances the town into the next stages of budget review while preserving opportunities for changes before final adoption. Councilors and staff said they will revisit revenue estimates and certain expenditure lines at upcoming hearings, including the public hearing on June 11 and final adoption slated for late June.

Most important facts - Proposed FY26 general-fund budget: $77,199,531 (presented as $77,200,000 in the presentation). - Proposed tax rate: $13.3708 per $1,000 in assessed value (a 1.49% increase). - Projected tax levy: about $65,481,448 net tax revenue (2.5% increase over FY25, as presented). - Estimated collection rate used in calculations: 97.75%. - Vote: Council provisionally approved the revenue line 7-0.

Supporting details and council questions Reyna said personnel costs, targeted capital investments (about $650,000 proposed), and debt service related to a new school bond were primary budget drivers. Debt service is projected to comprise about 3.71% of the total budget, Reyna said, and is expected to decline after FY26, providing future flexibility.

The town intends to invest $1,170,000 from the general fund in road paving in FY26 and expects a Roadworks state grant of $184,211, which would yield roughly $1,354,211 available for paving if the grant is realized. Reyna said the town27s road-surface rating currently sits at 73.24 and that the planned program would likely push it above 74.

Councilors asked staff to revisit several revenue assumptions: - Interest income: The budget projects $225,000 in interest income (a 43.6% increase from FY25). Several councilors and one finance commenter said actual year-to-date interest receipts and the town27s audit cash balances suggested a higher realistic figure may be possible; staff noted some large balances have been earmarked for school-bond payments and will be spent before FY27. - Recreation program receipts: Historic shortfalls in Park & Recreation revenue prompted requests for more conservative or more closely vetted projections. - Prudence Island transfer-station stickers: Annual sticker sales were incorrectly applied to the Prudence Island budget in FY25. Staff confirmed those sticker receipts will be reallocated to the Headley Street (Portsmouth) transfer-station enterprise fund and reflected in the next sticker-price calculation.

Process and next steps The council provisionally approved the revenue numbers to keep the budget process moving and scheduled detailed departmental reviews. Staff emphasized the process remains flexible: final levy and rate decisions will be made after additional departmental hearings and when more-precise state aid figures become available. A public hearing is scheduled for June 11, with final adoption anticipated by the end of June.

Ending: The council27s provisional approval allows department-level hearings to proceed, while staff said they would return with updated figures and the council will have opportunities to adjust revenues or expenditures before a final vote.