This story by Carla Occaso was first published in The Bridge on Nov. 20
The Montpelier City Council is bracing for budget cuts when the first draft budget will be presented on Dec. 11. Initial figures to run the city in fiscal year 2026, without cutting current expenses, would cause taxes to go up over 24%, according to Montpelier Finance Director Sarah LaCroix.
LaCroix emphasized during the Nov. 13 city council meeting that her “budget discussion” report is not a proposed budget, but rather a compilation of costs at current service levels.
LaCroix wrote in her report, “I expect that the FY26 budget process will be the most difficult in recent history. The preliminary budget you see attached contemplates a 24.1% tax revenue increase. That percentage increase equates to $2,858,674 or 21.77 cents on the tax rate; this demonstrates the difficult task ahead for both Council and City Leadership.” She blamed increases on inflation, staffing costs, restoring items that were cut last year, and increasing the capital improvement plan.
LaCroix said all collective bargaining contracts end June 30, adding to a somewhat unknown expense bundle. Additionally, she reported that the Blue Cross Blue Shield Health insurance premium renewal is going up 22.2% for the first six months of the year. And, a bond vote asking to fund a tower truck for the fire department, at a cost between $1.9 and $2.6 million is coming up as well. She said she added back $900,000 that had been cut from last year’s budget, which included some positions in parks and recreation and other items. Therefore, her office is asking for guidance on any cost targets or goals on which to base the first budget proposal, the report states.
City Manager Bill Fraser said asking councilors to weigh in on the budget before seeing the first draft is a different process from prior years, but he and LaCroix wanted “you all and the public to know how daunting the choices are.”
Council member Lauren Hierl asked if there are other ways to raise money, such as through a local options tax. Council member Pelin Kohn asked for a list of personnel needed to provide core services such as police, fire, and public works. Council member Tim Heney noted that 75% of the budget appears to be labor and associated costs. “I’m thinking we really can’t go into this process saying we can maintain our whole labor force,” Heney said.
Council member Cary Brown said she agreed the 24% tax increase is “not something we can do” and talked about really prioritizing needed services such as emergency, fire, and police, but also trying to keep funding the capital plan and the paving plan.
“It got pretty dark for me as I was reading this,” council member Sal Alfano said. “We need to look at personnel. It’s a pretty hard thing to do but we need to see what the options are.”
Heney suggested looking at a 3.5% consumer price index increase as a target to aim for. He asked LaCroix how much money would be needed to reach that goal, and LaCroix said it would be about $2.5 million. Heney also suggested considering the senior activity center, the justice center, the recreation department and administrative staff as areas to look at cutting. LaCroix said the Community Justice Center is 100% grant funded.
Council member Adrienne Gil said she had been reading the budgets of other cities and noticed that she sees 30% going toward public works; 30% toward police, fire, and EMS; 10% toward central office staff; 10% toward parks; 10% toward rec; and 10% toward economic planning and development. Fraser said more detailed information would be provided with the first budget presentation.
