ASHEVILLE, N.C. (828newsNOW) — Asheville residents could see higher property tax bills under the city’s proposed FY2026 budget as city leaders work to balance Tropical Storm Helene recovery costs, rising operating expenses and long-term infrastructure needs.

The proposal includes a property tax rate increase of 4.95 cents above the revenue-neutral rate, an increase officials say is needed to maintain core services, continue storm recovery work and address ongoing financial pressures facing the city.

The fiscal year 2026-27 proposed budget totals $275.6 million, an increase of $19.6 million, or 7.7 percent, over the adopted FY2025-26 budget. The city’s General Fund, which covers most day-to-day operations, totals $187.46 million, up $4.64 million, or 2.5 percent, from the previous year.

City Manager DK Wesley is expected to present the proposal, which was released Friday, to the City Council on Tuesday. A public hearing is scheduled for May 26, with a final vote expected June 9.

Here are some of the biggest issues Asheville residents are likely watching as budget discussions continue:

City faced major budget shortfall

Earlier this year, Asheville officials projected a roughly $30 million budget gap tied to slowing revenues, storm-related financial pressures and increasing operating costs.

City leaders have since worked to reduce the gap through revised revenue estimates, utility fee increases and proposed spending cuts.

Storm recovery shapes spending decisions

Much of the city’s financial planning continues to revolve around Tropical Storm Helene recovery.

Officials have relied on one-time funding sources, including FEMA disaster loans and federal recovery money, to help offset revenue losses and pay for rebuilding projects.

Property taxes a major issue

Property taxes remain one of the most debated parts of the proposal.

City leaders have discussed the increase as necessary to maintain services, cover debt tied to voter-approved bonds and stabilize finances following Helene.

Additional concerns come as Buncombe County’s ongoing property reappraisal could also affect tax bills for some residents.

Public safety spending a priority

The budget includes continued investment in police and fire services, including pay adjustments, additional staffing and recruitment efforts aimed at improving retention.

Officials have said public safety staffing remains a major priority as the city continues recovering from staffing shortages and employee turnover.

Officials weigh service cuts, delaying programs

To help close the budget gap, city staff proposed reducing, delaying or pausing some programs, including arts grants, neighborhood projects, holiday events and community programming.

Officials have also discussed eliminating vacant positions and reducing some employee-related costs.

Infrastructure projects still moving forward

City leaders say infrastructure and capital projects remain central to the spending plan, including storm recovery work, transportation improvements, public safety facilities and affordable housing investments connected to the city’s 2024 bond package.

Affordable housing remains a focus

Affordable housing and housing stability remain among Asheville City Council’s top priorities as the city continues rebuilding after Helene.

Budget discussions have included affordable housing programs, recovery-related housing initiatives and long-term redevelopment planning.

Employee compensation increases included

The proposal also includes employee pay increases, including percentage raises and flat-dollar adjustments for lower-paid workers.

City officials say the increases are intended to improve retention and help employees keep up with inflation and rising living costs.

Residents continue debating spending priorities

Budget discussions have generated debate online and during public meetings, with some residents questioning city spending priorities, staffing levels and the balance between services and tax increases.

Others have voiced concerns about affordability as property values and living costs continue rising across Asheville.

Asheville City Council is expected to continue reviewing the proposal, hearing public feedback and making revisions in the coming weeks before adopting a final budget for the next fiscal year.