Lebanon City Manager Andrew Hosmer released his 2027 budget proposal Thursday morning, kicking off the period through mid-December, when the city council can review the plan and take feedback before voting on it Dec. 16.
Hosmer’s 2027 budget proposal includes a $5.2 million overall increase from the 2026 city budget — or 5.95% — though only the general fund portion affects the municipal tax rate.
“I think we’ve really moved this budget in a direction that is very responsible,” Hosmer told the Valley News. “It’s particularly conscientious of its impact on taxpayers in the city, which was a primary focus of all the department heads … to make sure that we appreciate the fact that every dollar we spend here in the city, the taxpayers of the city have to fund.”
Hosmer’s proposal calls for a $918,780, or 1.98%, increase in the city’s general fund, the flexible part of the municipal budget that affects tax rates and over which the city council has some control. Between 2025 and 2026, the general fund budget increased by 3.5%.
That 1.98% increase falls well within the bounds of a request the Lebanon City Council made in May, asking Hosmer to keep the tax formula increase under 3% for the fiscal year beginning Jan. 1. It falls below the U.S. Consumer Price Index inflation rate, at 3.7% between September 2025 and 2026, according to the Bureau of Labor Statistics.
It is also the first budget proposed under a charter amendment Lebanon voters approved in March, which caps how much the city can raise in taxes each year based on past spending, inflation and population changes. A two-thirds vote of the nine-member City Council can override the cap.
Hosmer expects the municipal tax rate to rise 3.3% in 2027, to $8.42 per $1,000 of assessed value, up from roughly $8.15 this year. For a home assessed at $400,000, that’s about $108 more in city taxes.
The tax rate can rise faster than the budget because it depends on how much the city needs to raise from property taxes after other revenue and any use of savings, divided by the city’s total taxable property value.
The proposed budget would raise $29.6 million from property taxes, Hosmer said, about $2.4 million less than the $32 million the charter cap would have allowed.
If the proposed budget is approved, it would fund four new jobs in the city: two firefighters, an assistant prosecutor for the police department, and an assistant assessor. Lebanon needs the latter, Hosmer said, to prepare for the transition when the current city assessor retires.
Hosmer’s budget proposal allocates less money to Lebanon’s unassigned funds — the portion of the general fund balance not restricted to a specific use — down from 18.19% last year and 25% in 2025 to 16.9% of the general fund expenditure budget. According to the city manager, this indicates Lebanon is moving away from using unassigned funds for operational costs, even though that isn’t their purpose.
Instead, Hosmer said, the city can use its unassigned funds to pay up-front for construction on Hanover Street, saving the city the bond interest it would otherwise need.
Lebanon’s municipal tax is one of four distinct rates that make up the total city tax. That, combined with county, local school and statewide education tax rates means Lebanon residents pay $21.53 per $1,000 of assessed value in total property taxes, under the 2025 tax rate, which was set after a citywide revaluation. The city’s municipal tax is the second-highest of the four, behind the local education tax.
The 2027 budget proposal includes a 3% increase in water rates and a 5% increase in sewer rates, compared to 8% and 3% increases in this year’s budget, respectively. Hosmer has earmarked a $500,000 increase in the paving budget to partially offset the $800,000 reduction in that category this year. High traffic means Lebanon streets need a lot of upkeep, he said, and budgeting for it is important.
“We’re a city of only 15,000 people, but on any given day, we may have a population of over 30,000,” Hosmer said. “The infrastructure impact of all of the visitors to our community is really significant.”
The budget proposal also asks for a $50,190 increase in cyber service funds, which Hosmer said the city needs to protect sensitive information.
“Making sure that we have the best cyber services that we can have to protect public information and public funds is really important to us,” he said.
Hosmer will present his budget proposal next Thursday, Nov. 5, at 5:30 p.m. in Council Chambers at City Hall, the first of five public budget work sessions in November. Each session ends with a public comment period. The council will hear comments on the overall budget Dec. 2, and the Dec. 16 public hearing and vote will be held at the Lebanon Opera House.
