City proposes 2026 budget with near 12% reduction in total revenue

ST. JOSEPH, Mo. (News-Press NOW) -- City leaders unveiled a proposed budget on Monday that includes roughly $25 million less in projected revenue for fiscal year 2026, largely the result of anticipated changes in the city's year-to-year budgeting practices designed to increase transparency and accuracy.

The city's proposed fiscal year 2026 budget includes $190 million in projected total revenue, an 11.7% decrease from the $215 million budgeted for 2025. The reduction in revenue is projected across all funds due to the elimination of fund transfers, with the most significant of them being transfers for the Public Safety and the Police Tax funds, and the American Rescue Plan Act funds.

"Our budget will still contain transfers in some form that's just part of normal government budget processes and there's nothing wrong with that," City Manager Mike Schumacher said during a budget work session Monday. "But it doesn't begin and won't be built upon an assumption." 

Monday's work session marked the first of four public budget meetings scheduled to take place at City Hall over the next eight days. A finalized budget is expected to go before City Council for first reading on May 27 followed by a final vote on June 9.

Overall, general fund revenue is expected to grow by approximately $2.1 million in fiscal year 2026, from $46 million to $48 million, roughly $500,000 more than growth recorded last year.

A budget summary for next year notes that overall expenses will continue to outpace revenue growth and create a tighter budget, partly driven by increased staffing and personnel costs pressuring nearly every fund.

Multiple city revenue funds are projected to see sizable net losses due to expenses or large capital projects:

A consistent theme throughout the meeting -- and one that Schumacher and finance officials have emphasized -- is long-term budgeting beyond this year to provide greater financial flexibility and allow city leaders to account for unforeseen expenses that may arise.

"The budgeting process should not be a 12-month snapshot. We need to be looking well down the road 5-to-10 years, laying out a plan for how we meet community's expectations," Schumacher said. "It's my job to make sure council has a clear picture of what the future looks like."

The city intends to use nearly $800,000 in marijuana sales tax funds, part of $2.3 million in marijuana tax funds, as part of a new 5-year vehicle replacement process to replace the city's fleet of aging vehicles across various departments.

More than 100 of the city's vehicles have north of 100,000 miles.

"(Mike) came in and saw all the requests coming in for the fleet ... Planning for the future. These funds will be able to at least give us a start to be able to get to to that future," Assistant City Manager Dawn Lanning said.

The year's budgeting process will be the first for Schumacher since he was hired last December, but far from his career-first given his extensive background in city government.

Two new proposals, one to establish a 20% minimum fund balance policy and another to consolidate the city's bidding/procurement processes across all departments, are expected to align the city with best industry practices and help produce notable costs savings.

"So we will realize savings. I'm 100% confident of that," Schumacher said. "The Police Chief doesn't necessarily know what things are being purchased at the Health Department for example. All those things have to go into the same place and be rolled together. So, we look very forward to getting that done.

The proposed budget includes a 3% increase in all personnel salary along with a 7.4% increase in health insurance-related costs and increases in retirement benefits.  

Monday's work session marked the first of four public budget meetings scheduled to take place at City Hall over the next eight days. A finalized budget is expected to go before City Council for first reading on May 27 followed by a final vote on June 9.

Correction: A previous version of this article has been corrected to clarify that a projected 2026 net loss for the Parks Sales Tax fund is the result of several large projects, including the initial phase of the indoor aquatic center.