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City finance staff propose 3.95% levy increase in FY2026 budget
Summary
Finance Director Jim Nolan presented a proposed FY2026 tax levy increase of 3.95% — a $3.5 million rise to a $92.4 million levy — and outlined how the city's two-tier residential tax program and new tax-billing software will affect bills and timing. He projected average owner-occupied bills would rise roughly $279 under the proposal.
Jim Nolan, the city's finance director, told the council the proposed fiscal year 2026 budget includes a 3.95% tax-levy increase that would raise the levy from about $88.9 million in FY25 to $92.4 million in FY26.
"What was being presented tonight is our proposed tax levy increase of 3.95%." Nolan said, explaining that the increase represents roughly $3.5 million. He also presented a projected FY27 levy increase of 2.5% that would further raise the levy to about $94.7 million.
Nolan framed the levy in the context of a three-year rollout of the city's two-tier residential tax program. Under that program, owner-occupied properties receive an exemption (24% of the average assessed value in the current proposal) and non-owner-occupied properties are taxed at a higher rate. Nolan said participation in the owner-occupied tier has grown from 36% in FY24 to 51% in FY26, increasing the program's total exemption amounts.
On household impact, Nolan said the average owner-occupied homeowner would see an estimated bill of about $6,561 under the FY26 proposal — "about $279 increase from last year" — while non-owner-occupied residential properties would see a higher average bill, roughly $10,504 in the example presented.
The presentation also outlined tax-billing timing: the city will process bills with new tax-billing software and expects bills to be generated the week of June 16 so taxpayers will receive them well before the August 5 first-quarter due date.
Why it matters: The levy proposal is the central revenue decision shaping available funds for personnel, capital and civic-support requests the council will decide in coming sessions. Staff cautioned the council about limitations on levy growth (the city cannot exceed a 4% increase except in specified exceptions) and noted the commercial rate is tied to the lowest residential rate, with tangible property rates set by the general assembly.
What's next: The city manager formally submitted the biannual proposed budget April 9. Staff scheduled the first public hearing for May 14, a second for May 28 and a possible third on June 11; council action on the levy and budget will follow those hearings.
