Grand Rapids City Manager Mark Washington presented a balanced budget proposal for fiscal year 2027 that includes $785.4 million in spending, representing a 6.4 percent increase over the previous year.

The budget focuses on sustaining essential services while managing financial pressures from inflation and rising personnel costs. Washington told commissioners Tuesday that the plan reflects a commitment to responsible stewardship and long-term resilience.

Key budget highlights include:

• $75.4 million for Grand Rapids Police, including $1.3 million for 10 new officers added during fiscal year 2026
• $48.3 million for Fire services
• $40.4 million for Parks and Community Services
• $201 million for Water and Wastewater services
• $17.8 million for Library Services
• $21.1 million for Refuse and Recycling

The city is ending fiscal year 2026 with a $2.3 million deficit, with $207.8 million in total expenditures exceeding $205.5 million in total revenue. Chief Financial Officer Molly Clarin attributed the deficit to additional capital expenses approved by the commission, including over $4 million for the Grand Rapids Public Museum project.

Clarin said the city is using reserves to stay within financial targets. The general fund will end fiscal year 2026 at $86 million, which represents 41 percent of expenditures.

Property taxes

The proposed budget includes a 1.2 percent decrease to the city property tax millage. However, Washington said the average homeowner will still pay about $51 more per year due to rising property values. The average Grand Rapids home has a taxable value of $87,126.

If the commission approves the proposed property tax rate of 8.7513 mills, the average homeowner would pay $771.82 in property taxes. Last year, the average home had a taxable value of $81,354 and the average homeowner paid $720.69 in property taxes.

For every dollar collected through property tax, 32 cents goes toward the general fund, 24 cents goes toward the library fund, 19 cents goes toward the refuse fund, 13 cents goes toward the capital refuse fund, and 12 cents is dedicated for the parks fund.

Public safety overtime

The city is budgeting $8.3 million for police and fire overtime in 2027. However, this figure has exceeded actual costs in recent years, with overtime costing the two departments $11.6 million in 2025 and $13.1 million in 2026.

Washington said the city is conducting a study on overtime impacts. He also noted the city is waiting to see how much police staffing and overtime will be needed to cover traffic management for the new Acrisure Amphitheater opening in May.

Affordable housing

The budget includes $10 million being transferred to the Affordable Housing Fund from the sale of the city 17-acre property at 201 Market Avenue SW, where the Acrisure Amphitheater is being built.

The city also has $8.2 million in federal funding for community development, with $7 million specifically supporting programs that address homelessness and housing instability.

Washington said the city is seeking to budget $100,000 for the Mel Trotter personal belongings storage program. Previously, the city used federal pandemic recovery funds for that program, but this year the city is using money from the refuse fund to continue investing in the program.

Parking rates

On-street metered parking rates will not increase this year, and the maximum special event rate for parking lots remains unchanged at $25. Monthly parking rates will increase with the cost of living, and electric vehicle charging stations are transitioning to an energy-based pricing model.

A new agreement with The Rapid and improvements to the Downtown Area Shuttle service will prevent an annual rise of about $1.6 million and lower future capital needs by $7 million over a five-year period.

Next steps

Commissioners will further discuss the proposed spending plan during two upcoming work sessions at 9 a.m. May 5 and 10 a.m. May 12. A budget public hearing is scheduled for 7 p.m. May 12.

The plan is for the city commission to adopt the new budget on May 19.