From Mayor Joshua A. Garcia:
On June 23, the City Council convened in a Special meeting to review and vote on the Mayor’s proposed FY26 budget. I will have a clean version of the updated budget on the city website soon.
In this phase of the budget process, the City Council can cut but can not add to the budget. The council made $148,838 worth of cuts which includes:
- $25,000 from the Mayor’s Contract Services line
- $3,838 from the Mayor’s Dues & Subscriptions line
- $10,000 from the Police Department’s Special Events Overtime line
- $55,000 from the DPW Street Lights line
- $10,000 from DPW Parks Division Overtime line
- $20,000 from Life Insurance line
- $25,000 from Claims line
The following is the trending percentage increase to the tax rate since 2021. The increases are largely due to uncontrollable key cost driver obligations:
- 2021= 2.72%
- 2022= 1.92%
- 2023= 5.01%
- 2024= 1.12%
- 2025= 5.47%
- 2026= 3.90% (estimated – I anticipate a reduction by the time we set tax rate at end of calendar year due to conservative revenue estimations and maximum new growth potential not yet realized)
The key cost drivers are the following and we continue to monitor and do what we are able to limit increases:
- Education: The City’s required local contribution to the public schools will rise by 5.87%($773,886), in accordance with the Student Opportunity Act, bringing the total to $13,957,634. After all offsets, the City’s net cost will increase by 5.23%,or $1,187,772.37, totaling $23,888,559.71.
- Transportation: Costs continue to escalate, increasing by 10.32% ($1,195,465) for a total of $12,783,451.
- Health Insurance: Premiums went up by 9%, or $661,859, totaling $13,746,739.
- Pensions: The Retirement Board’s accelerated funding schedule mandated by the State, targeting full funding by 2032, requires a 4.65% increase ($584,545), bringing the retirement appropriation to $13,147,588. Roughly $8 million of which keeps the city on schedule for fully funding retirement by 2032. This is where your taxes are tied up the most. By 2032, the city will have $8 million they can give back to taxpayers or invest in critical needs.
There are changes internally that have been done and are being pursued to save and preserve but its nickels and dimes in the grand scheme. To put into perspective, for every .5% of an increase or decrease, it’s $600,000.
The proposed and approved budget left on the table a small surplus. However when the new real estate and personal property valuations are certified by the state, this surplus will grow and at that time additional adjustments can be made. Because of the conservative estimations of receipts and the maximum new growth potential not yet realized, our excess capacity may be greater than anticipated, which offers the city a little more flexibility to pivot under unforeseen circumstances.
The budget is a moving target with new revenue projections being realized every day. We will know more about our revenue capacity as we get closer to the calendar year-end prior to setting the tax-rate. I anticipate making additional adjustments to the budget as we get closer to calendar year-end so that we can strike a better budgetary and service need balance.
On that end, at the Special Meeting of the City Council on June 23, 2025, the final vote of the FY26 budget was adopted on a call of the roll of the yeas and nays. The proposed budget with the final cuts was passed with 8 yeas in support of the total budget (Anderson-Burgos, Devine, Givner, Sullivan, Magrath-Smith, Murphy-Romboletti, I. Rivera, J. Rivera). And 4 nays against the total budget (Greaney, Jourdain, Ocasio, Vacon). Councilor Bartley was absent from the meeting when the vote took place.
I want to thank all departments heads who have participated in the budget process that has resulted in a budget that is balanced with no service reductions. Lastly, thank you to the City Council for their ongoing support.