POUGHKEEPSIE – The City of Poughkeepsie adopted its $115.2 million 2026 budget on Tuesday. The plan includes a 7.93 percent property tax levy increase, but many homeowners will see lower tax bills due to a reduction in the homestead tax rate for the second year in a row.

“We are firmly committed to responsible budgeting, transparent oversight, and strategic investment, guiding every financial decision we make as we build a stronger, more sustainable future for all who live and work here,” said Mayor  Yvonne Flowers.

The budget allocates $73.7 million to the General Fund, focusing on city services, road and water system repairs, and maintaining financial stability. Key investments include lead service line replacements, more red-light cameras, and funding for public safety and community programs.

The fund includes a modest tax levy increase of 7.93 percent. However, despite the overall levy increase, many residential property owners may see a decrease in their actual tax bills due to a reduction in the homestead tax rate for the second consecutive year. This year’s homestead tax rate decreased by 3.37 percent, falling from $10.82 in 2025 to  $10.46 per $1,000 of assessed value. Consequently, homeowners will likely pay less in taxes, particularly if their assessed property values have not changed dramatically. Non-homestead properties, namely commercial and mixed-use properties, will see a 3.13 percent  increase in their tax rate, rising to $14.34 per $1,000 of assessed value.

The 2026 fiscal year encompasses key investments while maintaining a conservative fiscal approach, according to a statement released by the city on Wednesday evening.Budget priorities include:

• Strengthening city services such as public safety, sanitation, and community programs.

• Maintaining financial stability by protecting the City’s improved credit ratings and growing the General Fund balance, now at $2.65 million.

Some of the largest cost drivers in the budget include mandatory increases in healthcare expenses, pension contributions, workers’ compensation, and other non-discretionary costs.  These costs have increased by more than $2 million, according to the city, which prevents the city from remaining under the New York State tax cap for 2026, resulting in the city overriding the tax cap by nearly 4 percent, for a total tax cap override of 5.93 percent.

The mayor’s office warned that Inflationary pressures also continue to affect the City’s operating costs.  To maintain essential services and reduce deficits in enterprise funds, the City raised the rates for water and sanitation, while sewer rates remain  unchanged.    Water rates will increase from $5.94 to $7.13 for the average homeowner, and sanitation rates will increase by approximately $10 per quarter for a typical single-family home.  These changes are necessary, the administration said, to reduce  the existing Sanitation Fund deficit of $2,89 million.



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