Middletown council begins FY27 budget review as administrators outline $105M school bond timing and 3.2% proposed tax-rate increase

The Town Council convened a Saturday budget review to receive the proposed FY2026–27 budget and begin line-by-line consideration of the town and school spending plans. Town Administrator Sean summarized the budget drivers and the capital program, saying the town faces higher medical premiums, labor shortages and several large infrastructure projects that will shape spending in the next 12 months.

Sean highlighted several projects expected to affect the budget: upgrades to the Coddington pump station to increase sewer capacity, work on Paradise Avenue tied to a potential $5 million BUILD grant, sidewalks and utilities work on Lower Quinick Avenue, and a $19 million regional Safe Streets grant in partnership with Newport and Portsmouth. He also said the town is implementing a formal cost-allocation plan as shared services expand and that revaluation and state property-tax changes will have fiscal impacts.

Finance staff presented a proposed tax-rate increase of 3.2% intended to fund the combined town and school levy; officials said the change would add roughly $0.29 to the owner-occupied rate and $0.38 to the owner non-occupied rate. The presentation also showed a levy split where roughly 29% of the increase is town-related and 71% is for the school system.

On school construction debt, the finance team described a multiyear cash-flow plan for the previously approved school project. Town staff said they plan to use fund balance and bond premium to smooth debt-service costs in the short term and that when state school-aid reimbursements begin (projected in FY2029), the town will apply that money to replenish the fund balance and offset long-term debt costs. "The way it's structured currently, the forecasting is that we do not need to increase property taxes," one finance presenter said.

Councilors pressed department heads on specifics — from building-permit fees set by the state to the town's ability to charge for second refuse barrels — and asked for follow-up on several items, including the cost-allocation plan and the timeline for state reimbursements tied to the school bond. The council formally voted to receive the FY27 budget and to begin review; subsequent votes and departmental discussions will determine the final levy and any changes to department line items.

What happens next: the council will continue departmental reviews, hold public hearings as required, and consider whether to adopt the tax levy and budget as presented.