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Owensboro proposes balanced $80M-plus budget with no tax-rate change, boosts infrastructure and employee pay
Summary
City Manager Nate Pagan presented a balanced fiscal year 2026–27 budget totaling just over $80 million that holds the tax rate steady, proposes a 3% cost-of‑living adjustment for staff plus step increases, and prioritizes record spending on infrastructure and street maintenance amid looming pension cost pressures.
City Manager Nate Pagan presented Owensboro’s proposed fiscal year 2026–27 budget to the City Commission, saying staff are recommending a balanced plan and "we are proposing no tax rate changes of any sort in the budget next year." The package projects just over $80 million for the general fund, with salaries and benefits remaining the largest line item.
The draft plan boosts infrastructure and street maintenance to record levels in response to commissioner and public feedback, and preserves investments in public safety. Pagan said the city will be conservative overall while aligning resources with the Commission’s priorities.
Finance staff laid out the revenue side: Director Angela Winger said the city budgets about $80,153,872 in general‑fund revenue, led by occupational withholding ($25,287,595), property tax ($15,458,812), and insurance‑premium license fees ($9,648,523). Winger noted interest income and other receipts but said the administration is taking a conservative approach to unpredictable categories such as net‑profits receipts.
The budget includes personnel increases to maintain market pay: the proposal funds a 3% cost‑of‑living adjustment across the pay chart in addition to routine step increases that staff receive each year. Deputy Director D. Galloway told the Commission the finance team has budgeted for these personnel costs across departments.
Pension obligations were a repeated theme. Pagan said recent actuarial changes saved the city roughly $1 million this cycle, but warned city staff are budgeting for a possible $1.4 million increase in pension contributions next year unless the pension board or other mitigations reduce that pressure.
Angela Winger presented a five‑year long‑range forecast that shows a modest operating surplus in the current year and modest deficits appearing in later years under conservative assumptions. She emphasized Owensboro’s strong fund balance and said it remains above the city’s minimum policy target through the forecast horizon.
The presentation closed with staff noting the budget remains a draft; the Commission will act on revenue and rate decisions later in the budget calendar, and staff will return with final numbers and any recommended adjustments.
