City Manager Dionne Mack and CFO Robert Cortinas presented their preliminary budget for FY 2026 and it comes with a 6.5% property tax increase.
That works out to $1,701 for the average home (valued at $223,435), compared to $1,597 last year.
These figures are estimates based upon a projected increase of 5.60% in property valuations, but historically the City has been very accurate with its preliminary budget numbers. The actual property valuations will be shared with local taxing entities on July 25.
The new budget will be $1,383,260,901, representing an increase of $50,212.984 over FY 2025, or 3.8%. Of that, the General Fund Budget will be $624,441,622, which is $24,806,458 more than FY 2025, or 4%.
Meanwhile, the property tax rate will remain at $0.761405 per $100 of valuation, with debt service dropping from $0.230555 to $0.218762 and O&M rising from $0.53085 to $0.542643.
In his comments today, Mayor Johnson was ecstatic that the FY 2026 tax rate will be “flat” while strategically omitting any mention of the tax increase that will result from higher property valuations.
Let us be clear. Not only will the Mayor break his campaign promise to lower our property tax, but he will also break his promise to fix our streets, which remain grossly underfunded in the new budget.
The Mayor expressed pride that the City’s debt principal has decreased from $1.6 billion in 2022 to $1.3 billion today, with the debt service rate dropping to its lowest level since 2012. Yet he knows the City must issue nearly a half-billion dollars in GO debt over the next several fiscal years because of the voter-approved Public Safety Bond and Community Progress Bond. By 2030, the City’s debt will be back above $1.6 billion.
One thing conspicuously missing from the presentation was any mention of the $35 million the City wants to contribute to the Deck Plaza, as outlined by Karina Brasgalla in her presentation on April 15.
We predict the City will raid the fund balance to help pay for the $412 million boondoggle rather than using it to achieve a no-new-revenue tax rate for a third year in a row, building on the work of the previous administration.
Although the budget presented today was only preliminary, we think it is highly likely the 6.5% tax increase will be voted into law by August.