A tax increase that could add as much as $132 a year to the average Meadville homeowner's bill could be on its way. At Meadville City Council's first discussion of the 2027 budget on Tuesday, Finance Director April Smith proposed raising taxes by 2 to 4 mills.

Smith told council members that the average taxpayer pays about $33 to $34 per mill, and that each mill represents about $152,000 in revenue for the city. An increase of 4 mills would generate about $608,000, according to Smith — just enough to close what has become the typical deficit after more than a decade of balancing city budgets with reserve funds.

“For the past 13 years, the city has been borrowing from ourself to balance the budget, meaning we’ve taken from one fund to balance the general fund,” Smith said. “That fund has now gone away. We have used all of the funds out of our rate stabilization fund. So, at this time, we do still have a revenue problem.”

The rate stabilization fund was established in 1997 with $1.9 million from the sale of the sewer system to the Meadville Area Sewer Authority, and has served as a rainy-day fund since. The fund and other sources have provided an average of about $500,000 each year since 2020, according to Smith.

“I’m not saying it’s going to be that much this year,” Smith added, “but I anticipate something.” Reserve funds remain in the city’s real estate fund, which holds proceeds from past sales of city-owned property, but Smith told council those funds should be kept for unexpected emergencies. “We have a little bit left in it to cover our expenses,” she said, pointing to the possibility of a failed server or a tornado tearing the roof off a city building. “I prefer not to touch that.”

When Mayor Jaime Kinder asked how much remained in the real estate fund, Smith said she did not recall the exact amount. The city’s 2026 budget lists a real estate improvement fund containing $1.1 million.

The discussion came two weeks after council approved a new contract with the police union that guarantees five consecutive years of 4.8 percent salary increases. Kinder and other council members had begun signaling the likelihood of a tax increase even before approving the 2026 budget last December. “We are doing our best this year,” Kinder said during a study session devoted to the 2026 budget. “We are probably going to have to look at possibly raising taxes next year because of insurance increases and utility increases and things that we can’t hold back, right? Even though we are doing our best by going piece by piece and lowering the things we can control.”

While no council members explicitly agreed to an increase of any size during Tuesday’s discussion, none rejected the possibility, and the discussion suggested an increase was inevitable. One possible mitigating factor is increased contributions from major nonprofits in the city. Nonprofits are exempt from property taxes, but many make payments in lieu of taxes that can lessen the burden on other property owners. This year, Allegheny College will give the city $100,000 and Meadville Medical Center will pay $75,000. MMC pays an additional $85,000 a year as part of a security agreement with the city. Nonprofits including MMC and The Arc of Crawford County have also purchased police cruisers for the city in recent years.

Council member Autumn Vogel reiterated council’s goal of obtaining $500,000 a year in payments in lieu of taxes from nonprofits. The more that can be generated from nonprofits, she said, the less that would be needed from taxpayers in the form of a tax increase. “Everyone reach out to the Meadville Medical Center, Allegheny College, and encourage them organizations to contribute heavily,” Vogel said. “That’s still a small fraction of what they would pay if they paid property taxes.”

By the Conneaut Valley Post