The City of Newburgh is proposing a larger budget for next year, with increased spending on municipal services, staffing and infrastructure improvements.

The city’s proposed 2027 budget includes approximately $109.8 million in spending, up 6.1% from the $103.5 million adopted for 2026. Of that amount, $77.5 million would go toward the city’s general fund, which pays for most day-to-day operations, an increase of $5.7 million, or 7.9%, over this year.

Interim City Manager Jason Morris presented the spending plan to the City Council on Tuesday, Oct. 13, outlining proposed staffing changes, rising employee costs and increases to property taxes and water rates. The proposal would keep the city’s property tax increase within the state’s tax cap.

Under the proposal, the amount the city collects in property taxes would increase by approximately $1.16 million, bringing the total to $25.9 million. Morris attributed the increase largely to rising employee benefits, anticipated salary increases and efforts to reduce the city’s reliance on savings from previous years and vacant positions.

For homeowners, the proposed residential property tax rate would increase by 3.87%, from approximately $10.22 to $10.61 per $1,000 of taxable assessed value. A property with a taxable assessed value of $200,000 would see its annual city property tax bill increase by approximately $79, assuming its assessment remains unchanged.

Commercial and other nonresidential properties would see a 2.91% increase in their tax rate, with the estimates applying only to city property taxes and not including school or county taxes.

The proposed increases follow a year in which the City Council adopted a budget that lowered residential property tax rates by 3.85% and nonresidential rates by 4.86%.

A significant portion of the spending increase would go toward employee salaries and benefits. The city has proposed approximately $51.4 million for those expenses, with employee benefits alone increasing by $2.8 million. Spending on equipment and capital projects would also rise by about $1.7 million.

The budget would add several positions across city departments, including two laborers dedicated to repairing sidewalks throughout the year. Morris said those positions would be funded through the federal Community Development Block Grant program at no cost to the city.

Other proposed positions include a police department clerk to handle Freedom of Information Law requests, a secretary to city boards and commissions, and a maintenance mechanic for the recreation department. The proposal would also create a city electrician position in the DPW, along with restructuring positions in the assessor’s, comptroller’s and planning departments.

The spending plan also includes proposed raises for elected officials and would bring the salaries of at-large and ward council members to the same level. It also sets aside funding for anticipated salary increases as the city negotiates new contracts with its employee unions.

To help cover the increased spending, the city expects approximately $17.7 million in state aid, nearly $3 million more than budgeted for 2026. It also plans to use approximately $2.3 million from its fund balance, money accumulated from previous years, which is about $679,500 less than the amount included in the 2026 adopted budget.

Residents could also see higher water and sewer bills. The city is proposing a 3% increase in water rates, while sewer charges, which are tied to water rates under city law is expected to also rise. Sanitation rates, however, would remain unchanged.

The proposed budget comes as the city continues to report improvements in its financial standing. Newburgh received a fiscal stress score of zero from the state comptroller’s office for the seventh consecutive year, making it the only city in New York to maintain that score for seven straight years, according to the city’s budget presentation.

The city also maintained its A1 credit rating from Moody’s and received the agency’s highest governance rating of G1. Newburgh also received a 2026 Distinguished Budget Presentation Award and improved its environmental stress score from 33 to 30, although it remains classified as susceptible to environmental stress, which takes into consideration factors such as population, poverty, income, unemployment and state and federal aid.

Mayor Torrance Harvey praised the city’s financial progress, comparing its current position with that of previous years.

“This financial picture is amazing to what it was 10 or 15 years ago,” Harvey said.

The council also held a public hearing Tuesday on a proposed local law that would allow the city to exceed the state’s property tax cap if necessary. Although the proposed budget remains within the cap, Harvey said the measure was a precaution taken during the annual budget process.

“This is protocol that we do every year, just in case we have to go over the 2%  tax cap,” Harvey said.

The budget remains subject to review and changes by the City Council.

“I know the City Council is going to be looking at this with a fine-tooth comb between now and the vote,” Harvey said.

Residents will have another opportunity to weigh in during a public hearing on the proposed budget scheduled for Nov. 9. The council is expected to vote on the final spending plan Nov. 23.