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Peekskill manager proposes 2026 budget with 3.5% levy increase; average home to pay about $89 more
Summary
The city manager's tentative 2026 budget would raise the tax levy about 3.5%, increasing the tax rate roughly 2.98% and adding an estimated $88.74 a year to the tax bill of an average-value home; staff said other revenue increases and a $500,000 planned use of fund balance help close the gap.
City officials presented the city manager's tentative 2026 budget at a committee-of-the-whole meeting on Sept. 29. The proposal includes a roughly 3.5% increase in the tax levy that city finance staff said produces a tax-rate change equal to about a 2.98% increase to property owners.
Comptroller Toni Tracy summarized the key revenue drivers in the tentative plan, citing a roughly $700,000 gain tied to the levy, a new payment-in-lieu agreement at 645 Main Street that she said brings about $235,000, and expected penalties and interest collections of about $316,000 once the city's overdue-tax collection process runs through next spring. Tracy said the budget assumes using about $500,000 of appropriated fund balance and projected general-fund totals and enterprise funds that leave the city with a range of supporting revenues outside the levy.
"There's an overall revenue increase of $1,077,962 reflected in this '26 proposed budget," Tracy said in the presentation, adding the package also factors an anticipated 8% increase in employee health contributions. She told councilmembers that the proposed levy at the top line translates to a tax rate of $316.25, up from $307.11, and that the effect on an average-value residence would be about $88.74 a year.
Councilmembers pressed staff on the assumptions behind the sales-tax and dispensary revenue estimates and on the remaining unappropriated fund balance after the proposed use of reserves. Tracy said the city holds approximately $4 million in undesignated fund balance now and that the $500,000 draw would reduce that to roughly $3.5 million if enacted.
The city manager said department-level reviews will continue and scheduled additional budget review meetings in early October. No final votes were taken at the meeting; staff will return with follow-up analyses, including a further breakdown of dispensary collections and debt-interest impacts.
