Asheville narrows budget gap to $10.5 million for FY27 proposal
Asheville cut its FY27 shortfall to $10.5 million, but council still must decide whether residents will pay more, lose services or wait longer for projects.
Asheville has narrowed its FY27 budget gap from more than $30 million to about $10.5 million, but the hard part is still ahead: City Council must decide whether the remaining shortfall is covered by deeper cuts, higher taxes, or a mix of both.
Budget and Performance Manager Lindsay Spangler said the smaller gap reflects updated revenue projections, department savings and revisions to some of the city’s biggest cost estimates. City staff have already closed about $7 million through reductions and efficiency measures, including a hiring freeze and closer review of vacant positions. Even so, the city is still balancing recurring expenses against recurring revenue, and officials have made clear that one-time fixes cannot carry the budget again.
Several pressure points remain. Asheville initially expected to need about $3 million more for transit, but that estimate came down. Health insurance costs are still projected to rise by $5 million to $6 million, while state-mandated retirement contributions will add another half-million dollars. Debt service on the $80 million bond package approved by voters in November 2024 is also expected to add about $6.5 million to the budget, after the related property-tax increase was delayed following Tropical Storm Helene. The city has tied those bonds to affordable housing, transportation infrastructure, public safety facilities, and parks and recreation.
The city’s finance team began the FY27 process about six weeks early as a gesture of transparency after Helene and amid uncertainty over revenue and costs. That early start came as Buncombe County entered its 2026 property revaluation, the first in five years, which requires Asheville to calculate and announce a revenue-neutral tax rate. Under state law, that rate is the amount needed to generate the same property-tax revenue as before revaluation, but council is not required to adopt it. Asheville says property taxes make up more than half of General Fund revenue, making the tax decision central to how the budget closes.
The city’s current tax rate is 44.19 cents per $100 of assessed valuation. Council is scheduled to hear the FY27 proposed budget on May 12, take public comment on May 26 and hold a final vote on June 9. The tax rate for FY27 will be set in June as part of budget adoption.
At a Feb. 24 public comment meeting, residents urged city leaders to protect essential services and avoid tax increases or service cuts if possible. That pressure now sits against the same basic question facing City Hall: how much of Asheville’s recovery, operating costs and future capital needs will be paid for by residents this year, and how much can be delayed without weakening the city’s core services.
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