Asheville manager proposes FY27 budget with tax‑rate increase to close $8.9M gap

City Manager D.K. Wesley presented the proposed fiscal year 2026‑27 budget to the Asheville City Council on May 12, saying the plan balances targeted investments with the city’s long‑term fiscal health while acknowledging continued pressure on residents and municipal operations. Wesley said the proposed all‑funds budget totals about $275.6 million and includes a five‑year capital improvement program through FY31.

Wesley told council the budget responds to both expenditure and revenue challenges: rising personnel costs—chiefly health‑care and retirement—an $800,000 increase to the transit contract and other inflationary pressures on fleet, recycling and tipping fees. He said FY26 used one‑time revenues, including a $5 million FEMA loan, that are not available for FY27. To close an $8.9 million projected gap, the proposed budget includes a property tax rate 4.95¢ above the revenue‑neutral rate; staff calculated the revenue‑neutral rate at 32.89¢ and the proposed new rate at 37.84¢ per $100 of assessed value.

The manager outlined reductions and balancing strategies that helped narrow the gap, including eliminating a net 16.5 vacant positions and pausing the city’s annual contribution to the public‑art fund while maintaining a $250,000 available balance for general public art and $200,000 for river‑arts‑district projects. Wesley also flagged service reductions—most notably a proposal to return community center hours to pre‑COVID levels—and one‑time uses of fund balance for capital projects, including stormwater priorities.

Wesley described investments that would remain under the proposed plan: a 2.8% cost‑of‑living salary adjustment for staff, a 5.15% pay‑plan increase, continued public‑safety staffing and services, use of sales tax and BID funds to support downtown events, and funding to continue the county homeowner grant participation at $75,000. On the capital side, staff proposed a new sustainability allocation to support more energy‑efficient HVAC and other green elements in select projects.

Finance Director Tony McDowell supplemented the presentation with details of the capital funding strategy and a routine proposal to issue interim limited‑obligation bonds (bank notes) of roughly $40 million to provide cashflow for CIP projects on a two‑year cycle. He said staff will return with final bond documentation and that the council would vote on final adoption in a subsequent meeting.

Council members asked for additional illustrations of tax impacts across a range of home values rather than a single median example; Wesley and staff agreed to present ranges at the public hearing. The council scheduled a public hearing on the budget for May 26 and final adoption for June 9.

The manager’s presentation and supporting slides are posted with the meeting materials. The proposed budget remains subject to change before adoption as staff finalize numbers and respond to council direction and new information from the county on assessed valuations.

Next steps: public hearing May 26; the council is expected to adopt a final budget on June 9.