Portsmouth projects 6.3% general-fund increase for FY2027; staff says recurring growth nearer 3%
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Summary
Budget staff told the City Council the FY2027 general fund would total $360.7 million, a headline 6.3% increase driven largely by one-time items and adjustments; Trey Burke said recurring structural growth is closer to $9 million (about 2.9%). Council members pressed for delinquency breakdowns and assumptions behind school and intergovernmental figures.
Trey Burke, the city's budgeting officer, told the City Council at a June work session that the proposed FY2027 general fund is $360,700,000 and that the headline increase of 6.3% includes several one-time items.
Burke said that after removing one-time adjustments — including a $5.6 million increase in fund-balance appropriation and other timing items — the city's structural recurring revenue growth is about $9,000,000, roughly 2.9%. "If you strip those out, what you leave with is about $9 million, or about 2.9% revenue growth," Burke said.
The presentation broke down major revenue sources: real property taxes account for about 40% of the general fund and are projected at $143.2 million (Burke flagged a 5% growth assumption on that line); intergovernmental revenue (largely state funding) is nearly 20% of the total. Burke also noted a $13.6 million total fund-balance appropriation in the proposed budget that staff intend to use only for one-time expenditures.
Council members asked for detail on delinquency figures and the sources of recent revenue swings. Burke described a roughly $5 million delinquent-tax balance connected to prior underpayments and explained why investment-income lines have fallen by about $1.3 million as short-term interest receipts normalized. "As interest rates lower, so do the revenues from parking the money there," he said, explaining that short-term government investment yields have declined.
Staff pointed to specific line items as drivers of near-term increases: admissions tax receipts rose (Burke said admissions moved from about $500,000 to $1.4 million as museums and attractions recovered), ambulance-fee revenues increased after the city changed its billing vendor and practices, and water-related utility-tax receipts showed an unexpected uptick that staff said they would investigate.
Burke and council members also discussed the assumptions built into long-range charts, including how school-system funding was reflected on the expense side; Burke said projections rely on actuals and prior-year trends and pledged to provide more detail on how school costs were modeled.
The packet and briefing will feed the council's budget discussions; staff said they will return with more granular delinquency numbers and any additional analysis requested by council members. The work session recessed to begin the regular meeting at 7:15 p.m.
