Budget Discussion Centers On Lower Tax Rate

Princeton City Council spent much of its Sept. 8 work session reviewing a revised 2026-27 budget built around the voter-approval tax rate of 0.472959, lower than the rate staff had presented in August. Finance staff said that shift reduced ad valorem revenue in the general fund by about $3.33 million and required a new round of cuts while trying to preserve current core services.

Chief Financial Officer Kelly Wilson told council the earlier August presentation had used a higher rate, but the revised proposal followed council direction to return to the voter-approval rate. She said the action expected later that night was to set the proposed tax rate and a public hearing date for Sept. 16, not to adopt the budget. By the end of the work session, no final action had been taken on the budget.

Wilson said the proposed tax rate would amount to a 3.27-cent increase from the city’s current rate. Using the city’s median home value, she said the city portion of property taxes would rise by about $26.53 a year compared with what residents are paying now. She also said that on the same home value, the proposed rate would cost about $85.77 more per year than the no-new-revenue rate.

Council discussion also touched on broader budget pressures. Wilson said the general fund relies heavily on property taxes, license and permit revenue, and sales tax, and noted that permit-related revenue is expected to decline as the city builds out. Staff also pointed to continuing population growth, infrastructure needs, public safety demands, and bond-funded park projects as ongoing pressures on the city’s finances.

During the discussion, council members asked for more detail on the impacts of the lower rate and on spending categories that could still be adjusted before adoption. Staff said some items, including contract service details and other budget questions, would return for further consideration as the budget process continues.