LEBANON — The city manager has proposed a total municipal budget of $78 million for next year.
The bottom line is almost $16 million less than this year’s budget largely due to cuts to the capital improvements fund.
The spending plan, released by new City Manager Andrew Hosmer on Halloween, includes $46.5 million to be raised by property taxes.
In 2025, the city raised $44.3 million through property taxes.
The remaining revenues will come from other sources such as fees for solid waste, water, wastewater and airport use, payment agreements with Dartmouth Health and other companies, and meals and rooms taxes.
The 2026 budget is expected to result in a roughly 4% increase to the municipal portion of property tax bills.
Because of a recent citywide revaluation, the New Hampshire Department of Revenue Administration has not set the 2025 tax rate. Tax bills with the new rate are expected to be mailed in early December, according to a Tuesday alert from the city.
The municipal portion of the 2024 tax rate, which was used to calculate the first tax bill of the year this spring, was $9.66 per $1,000 of assessed value.
Last year’s city budget process in Lebanon drew an unusual amount of public attention when a proposed 11.9% municipal tax rate increase caused sticker shock for many residents.
Then-City Manager Shaun Mulholland also projected double-digit tax rate increases for several years in a row.
Last year’s increase was attributable to last minute changes to the city insurance policy, debt repayment for major projects and reduced use of the city’s unassigned fund balance to offset tax rates.
The City Council ultimately approved a budget with a more typical 7.8% municipal tax increase after cutting items across the board including the cost of the energy and facilities manager position, a vacant position at the library, paving and infrastructure spending and fireworks.
The board also transferred $300,000 in revenues from the downtown tax incremental financing district.
The City Council and city staff worked throughout this year to create policies aimed at decreasing tax rate increases and increasing public input into the budget process.
For example, city staff opted to defer almost $90 million in capital improvement projects including funding to replace the city’s second fire station, make a series of road and intersection improvements and extend the Mascoma River Greenway.
This will reduce borrowing and debt service and give the city time to retire about $8 million of debt in the next two years, according to the proposed budget.
The proposed general fund budget is about $1.75 million higher than last year. These increases are largely from wage and benefit increases for city employees, increased road paving and maintenance, and debt service, according to the budget.
Last year, the City Council opted to defer several paving projects to bring down the tax rate, allocating about $600,000 for the work. Now, the Department of Public Works requested $1 million for paving, but it is largely offset elsewhere in the budget.
Like last year, the largest portion of next year’s proposed operating budget is the police budget, at about $8 million, followed by finance, debt service and public works.
The City Council will meet with city staff to review the budget section by section at meetings throughout November.
There will be public input sessions on the budget Dec. 3 and Dec. 17, and the council will vote on a 2026 budget on Dec. 17. The new budget will take effect Jan. 1.
A full hearing schedule is online at https://lebanonnh.gov/DocumentCenter/View/21978/2026-Budget-Work-Sessions?bidId=.