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Troy finance workshop: 2026 income tax forecast flat as expenses climb; $4.2M drop in multi‑fund balance
Summary
Council staff told the finance committee that 2026 income-tax receipts are expected to be flat while general-fund recommended spending rises about 9.9% driven by wages, benefits and capital project carryovers; the city's aggregated fund balance projection fell by $4.2 million from last year’s estimate.
Speaker 1 (Unidentified Presenter) presented the proposed 2026 budget and a five-year forecast, saying income-tax receipts are expected to remain essentially flat and that the auditor’s conservative revenue assumptions will guide budgeting.
The presenter said withholding — the largest income-tax component — is increasing but net-profit collections remain volatile, and a prior state-level gateway backlog resolved with Representative Newman will not produce the carryforward growth previously expected. He said that conservatism from the auditor’s office is appropriate: “we will hit the budgeted number and maybe be a little bit above,” but he does not expect the trend growth the city saw in earlier years.
Why it matters: the packet’s ‘top sheet’ shows aggregate resources across all funds of $81.6 million, which led Speaker 1 to stress that this is not the general-fund balance alone. He highlighted that the multi‑fund projected bottom‑right number fell from $85.85 million to $81.6 million — a $4.2 million (5%) decrease from last year’s projection — driven by higher construction and materials costs and timing of multi‑year projects.
The recommended 2026 general‑fund expenses are about 9.9% higher than 2025, with operating costs up roughly 9.3% because of wages and benefits and capital investment up about 11% to address several large projects. The presenter said the city is holding a target reserve policy (roughly 50% of operating costs plus 125% of annual debt service) to maintain solvency through the five‑year forecast.
Other details: Speaker 1 noted planned transfers from the general fund to enterprise and capital funds to support projects, monthly reporting on revenues, and the potential need to borrow for capital projects in later years (bonding discussion moved to 2028; see related article). Speaker 2 and others asked clarifying questions but did not move any formal action; staff will bring recommendations and detailed line‑item analyses to the council on Dec. 1 and continue some follow‑up work before any formal vote.
Next steps: Council will review these recommendations at the December 1 council meeting; staff will email a more detailed breakdown of footnotes and line‑item assumptions and will present any bond/timing updates.
