Owensboro officials on Tuesday presented a proposed $80.1 million general fund budget for fiscal year 2026-27, outlining a plan that maintains current tax rates while continuing to invest in infrastructure, public safety, and community development.
City Manager Nate Pagan said the budget serves as a guide for how the City will allocate resources in the coming year.
“The budget is really our roadmap and how we deploy the resources that you provide for us over the next year,” Pagan told commissioners.
The proposed general fund totals $80,118,843, landing between this year’s adopted and amended budgets. City leaders emphasized a conservative approach, with Pagan noting the proposal includes no tax rate changes.
“We are proposing a balanced budget, and we are proposing no tax rate changes of any sort in the budget next year,” he said.
Personnel costs continue to make up the largest share of spending, with salaries and benefits exceeding $43 million. The budget also accounts for rising expenses, including increased health insurance costs and higher utility and insurance rates, though pension obligations are expected to decline slightly.
Officials pointed to several positive economic indicators, including a sharp increase in commercial and industrial investment and continued growth in active business licenses. At the same time, housing construction has slowed compared to last year, prompting discussion among commissioners about how to address ongoing shortages.
The Community Development Department’s proposed $361,875 budget focuses on administering federal programs that support housing and neighborhood revitalization. Officials said those funds help drive projects such as home rehabilitation, demolition of blighted properties, and first-time homebuyer assistance.
Community Development Director Abby Shelton said those efforts continue to make an impact locally.
“Your leadership allows us to leverage federal resources to expand housing opportunities and strengthen neighborhoods across Owensboro,” Shelton said.
Shelton also pointed to continued investment in the Monarch neighborhood revitalization area, where projects have generated significant public and private investment.
Commissioners spent time discussing whether similar efforts could be expanded citywide, with some noting the potential to convert uninhabitable structures into housing and increase opportunities for first-time buyers.
“I would not see that going outside of Monarch and actually going across the city,” Shelton said.
Officials also discussed broader housing strategies, including duplex developments and accessory dwelling units, though Shelton said there is no “magic bullet” solution to the shortage.
The Information Technology Department is proposing a $3.2 million budget, slightly down from last year. Priorities include maintaining infrastructure, strengthening cybersecurity, completing a backup data center, and modernizing internal systems.
IT Director Jeff Bell said protecting City systems remains a top priority.
“We take security very seriously,” Bell said. “The City has implemented off-site backups and additional safeguards to protect against ransomware attacks, a growing concern for municipalities nationwide.”
The City’s Geographic Information Systems division continues to operate as a shared service with Daviess County, supporting mapping used by emergency responders and other agencies. The budget includes modest increases tied to software and maintenance costs.
Utilities and fuel remain significant expenses, with utilities projected at nearly $3.5 million and fuel at about $1.2 million. Officials said costs are driven by facility operations and the City’s large vehicle fleet.
Insurance costs are expected to rise by more than 25%, driven by updated property valuations and broader market conditions.
Public safety continues to account for a large portion of the budget, with funding supporting police, fire, and emergency response operations, including staffing, training, and equipment.
Parks and Recreation funding supports maintenance of City parks and facilities, along with programming. Officials said the focus remains on maintaining existing assets rather than launching major new projects.
Despite those pressures, City officials said the budget remains balanced and aligned with long-term priorities.
Pagan said the proposal reflects feedback from commissioners and the community, particularly in maintaining essential services while positioning Owensboro for continued growth.
