FY27 Proposed Budget

2026. The City will again be penalized for growth in FY 2027 with a forced reduction to $8.24, and the levy must be no higher than $8.10 by FY 2029 (although it may be forced below $8.10 before then). This change, along with the new property tax exemptions for seniors and military veterans, will further strain the City’s primary revenue source in the future and may shift burden to other property tax levies. These challenges in part motivate the pursuit of alternative revenue sources, including the 1% LOST approved by voters in November 2025. Property reassessments occur in odd years, and the City typically experiences a larger boost in taxable value in those valuation years. FY 2023 deviated from that trend with a decrease in taxable valuation , due largely to a reduction in the taxable percentage of residential and multi family properties. These rollback impacts, combined with only limited new construction, led to another taxable valuation decrease in FY 2024. The taxable growth of 3.6% in FY 2025 and 2.3% in FY 2026 were positive steps forward, and 4.9% growth in FY 2027 helps further. However, these percentages fall short of the growth levels needed to support status quo operations since FY23, averaging only 2.0% per year. Figure 5 demonstrates how FY 2023 and 2024 mark the lowest two-year change in taxable valuation in the last decade, followed by comparatively modest increases since.

Figure 5: Total Property Tax Valuations & % Change over Prior Fiscal Year

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0%

Taxable Value (millions)

FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 Tax Value (millions) $3,421 $3,543 $3,745 $3,923 $4,258 $4,396 $4,376 $4,360 $4,517 $4,619 $4,847 Val % Change 7.50% 3.55% 5.72% 4.74% 8.54% 3.24% -0.46% -0.36% 3.61% 2.26% 4.93% -1.0%

Overall, the City continues its progress towards containing costs for residents and businesses despite financial headwinds. For eleven consecutive years ending in FY 2023, the City reduced its tax rate thanks to prudent debt strategies, operational efficiencies, and valuation growth. From FY 2023 through FY 2026, the City maintained a steady levy rate despite continued fiscal pressures. Now, the 1% LOST approved by voters allows another property tax rate reduction in FY 2027, consistent with State requirements for property tax relief. This is accomplished by reducing the debt service levy while simultaneously bolstering investment in infrastructure.

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