Asheville staff present FY2026–27 budget proposal that relies on property-tax increase and 2.8% COLA; public urges higher living-wage measures

City staff on May 26 presented a proposed fiscal year 2026–27 budget that they said would total $275.58 million and would rely on a property-tax adjustment to close an estimated $8.9 million gap.

Lindsay Spangler, the city’s budget and performance manager, told the Asheville City Council that the proposed general fund is about $187.46 million and that a combination of fee changes, spending strategies and a proposed property-tax rate increase would close the remaining shortfall. Spangler said the revenue-neutral tax rate calculated after the county’s revaluation is 32.89 and the rate being proposed in the package is 37.84 (numbers reported in the presentation). The budget document presented to council also includes a $7 million contingency for Helen recovery in capital planning.

The proposed operating budget includes a 2.8% cost-of-living adjustment (COLA) for permanent staff and a recommended 1.5% increase to pay grades, staff said; those items together were described as intended to move permanent full‑time employees up to the city’s pledged living-wage level. Spangler also noted major spending drivers that pressured the budget: an estimated $5 million increase in health and retirement costs and about $1.8 million to restore police department staffing to pre‑vacancy levels. Staff said the city continues to face elevated contract costs and debt-service obligations tied to the $80 million general-obligation bond approved by voters in November 2024.

The presentation outlined several balancing strategies: targeted fee increases already approved earlier in the year, program and position reviews, a temporary reduction in a 1% employer 401(k) match included as a potential balancing option (cost to the budget about $530,000 if removed, as discussed in the meeting), and maintaining a recovery contingency fund to avoid unplanned borrowing if federal or state dollars fall short on recovery projects.

Council members asked for follow-up data on several points staff raised: the exact cost to raise all employees to specified pledge levels, the number and share of temporary/seasonal employees who would not receive the proposed COLA, and the fiscal impact of restoring the 1% retirement match. Human resources director Emily Proancece said the city will provide follow-up information and reminded council a market/salary study is scheduled that will inform future, classification‑specific changes.

Public comment at the hearing was robust and largely critical of the proposal’s reliance on property-tax increases to finance staff raises. Speakers urged the council to prioritize base-wage increases and living-wage policy implementation over other cuts. Paul Howell and several other speakers said repeated property-tax hikes have shifted the burden to residents; community members including Wilco Ashabach and Jason Urus urged the council to avoid cuts to weekend community center hours and recreation services, citing broad community impacts. David Greenson urged greater investment in community violence-intervention models rather than additional police staffing, arguing evidence shows those programs can deliver better public-safety outcomes for the cost.

Several advocates—including Emily Argonada, Thomas Belalmore and representatives from Just Economics—asked council to revisit how raises are distributed, arguing that percentage-based COLAs widen gaps between high and low paid staff and that targeted increases or a higher floor might better meet the living-wage goal. City staff acknowledged the tradeoffs and committed to providing the requested cost estimates before the council votes on adoption at its June 9 meeting.

No action was taken at the May 26 meeting; staff will return with requested follow-up cost analyses and the council will vote on budget adoption at its next meeting.