NEWPORT NEWS — The city’s proposed $1.2 billion spending plan for the 2026 fiscal year attempts to balance addressing community needs with more conservative spending amid uncertainty around federal government.

The operating budget proposal, which City Manager Alan Archer introduced Tuesday to the City Council , is a 4.4% increase from this year’s adopted budget , including a general fund of more than $643 million. Some of the biggest expenses include a $128 million public safety plan, nearly $30 million in parks and recreation funding and a $2.4 million boost in local school funding, bringing total school operation funding to $125 million. More than $2.8 million will pay to improve the city’s streetlighting and the switch to LED lights.

This budget proposal is in addition to a revised 2026 Capital Improvements Plan (CIP), which city leaders said they expect to introduce in April.

Additional funds are also aimed at various efforts to boost employee compensation. The proposal includes $2.9 million to fund a 3% wage increase for non-sworn employees, $1.9 million for public safety step increases, and an additional $2.1 million to fund a broad band compensation plan.

Real estate taxes are expected to remain at the current level of $1.18 per $100 of assessed value, and user fees for water works, solid waste, storm water and waste water are all projected to remain unchanged.

The proposed budget allows full funding for ongoing projects such as the Office of Community Safety, which oversees violence prevention, and Office of Sustainability, which works toward long-term environmental sustainability.

However, Archer said funding new programs may be slowed by federal funding cuts.

“We’re in an unprecedented environment of uncertainty with the changing federal funding landscape,” Archer said. “This means that all aspects of this recommended budget, from filling positions, proposed salary adjustments and initiating new programs, will move forward in a conservative manner, living within the revenues that we generate.”

The 2026 budget proposal includes $5.2 million in anticipated federal and state grant revenue.

Overall city revenue growth is projected to fuel the larger budget to cover the cost of keeping tax rates unchanged. General fund revenue for the proposed budget is expected to be up 3%. More than half of that is comprised of general property taxes, which city leaders anticipate seeing a 1% growth amounting to roughly $370 million for next year’s budget.

Other local taxes, which cover roughly 20% of the city’s general fund revenue, are expected to grow 3.6% compared to this’ year’s budget, amounting to roughly $127 million.

Newport News Budget Director Lisa Cipriano said during Tuesday’s meeting real estate assessment growth of 3.76% is projected to generate $2.3 million in extra revenue. Additionally, most people will see a 5-20% reduction in personal property assessments over their 2024 bill.

Cipriano added city leaders have created a conservative budget over the last three years in preparation for a recession that has yet to happen, leading to a nearly 20% increase in recovered costs.

“For this particular budget, we are actually recognizing what we are collecting today in all of these very consumer-sensitive areas,” Cipriano said. “These are the most vulnerable areas, should there be a very severe federal funding reduction or impact.”

Some of these vulnerable areas include community programs like the Youth Career Program, Friday Night Hoops and Intergovernmental Transfer, all of which are planned to receive full funding.

City leaders said the focus on consumer-sensitive issues in the proposed budget were informed by a citizen engagement survey. Newport News received more than 1,000 resident responses providing feedback on 27 city services.

The survey reported some of the most important services and programs for resident satisfaction included eliminating vacant buildings, improving housing affordability, generating new business, easing traffic flow and expanding education access.

Of the top five most prioritized services, current education access received the highest current resident satisfaction rate at 46%.

In order to align itself with the priorities shown in the citizen engagement survey, the city assessed open positions and reallocated 43 vacant and hard to fill positions to other departments. This allowed for the creation of 12 new police and 12 new fire positions, with public safety being another top priority for residents.

Newport News Mayor Phillip Jones said despite economic constraints, the proposed budget reflects what residents need while limiting any financial strains on them to accomplish it.

“Yes, we had a larger budget than last year, but it is balanced, and my favorite part is that it takes into consideration our citizen survey and the needs and wants of our community,” Jones said.

City Council will meet to have topic-specific budget discussions in April. The city expects the proposed operating budget and the revised CIP will be adopted in May.