Budget committee hears FY26 revenue forecast; parks plan and personnel costs reviewed

The Lexington Budget, Finance and Economic Development (BFED) committee received an economic forecast projecting modest revenue growth and a parks fund briefing during a meeting summarized for the full council on March 11, 2025.

Councilmember James Brown told the council that Dr. Michael Clark, director of the Center for Business and Economic Research at the University of Kentucky's Gatton College, presented an economic and occupational tax forecast that projects payroll tax revenues to grow 4.5% in fiscal year 2026, to roughly $280.4 million, and net-profit tax revenues to grow about 7%, to approximately $71.4 million. Brown said the city's slow employment growth in FY24 is expected to continue into FY25 and FY26, and that Lexington's unemployment rate remains below the state and national averages.

Director Holbrook and other staff presented a financial update showing revenue collections slightly exceeding budget through the first seven months, with a positive variance of about 1%. Personnel costs were running within roughly 2.5% of budget through the same period, Brown said. No committee action was taken on the items at the BFED meeting.

The committee also received an update on parks funding and the parks master plan, "Your Parks, Our Future," adopted in June 2018 and updated in 2024. Council materials noted Parks and Recreation spent about $27 million in FY24, including roughly $17.5 million for personnel and $9.5 million for operations; capital expenditures average about $7 million per year going forward. Parks fund planning and policy frameworks were described as being finalized for presentation at a March BFED meeting; Brown's summary did not include final policy decisions.