As Cleveland City Council prepares to vet Mayor Justin Bibb's 2026 budget proposal, the city is in healthy standing to move ahead after unexpectedly high revenue carryover even with across-the-board raises for employees.
Despite serious concerns over President Donald Trump's sweeping federal cuts last year, Chief Financial Officer Paul Barrett said 2025 was a "very good" year for the city, with about $91 million in funds being carried over to 2026. That's up from $61 million between 2024 and 2025.
Still, Barrett said that doesn't necessarily mean big spending in 2026:
"For the most part, [2026] is gonna be very plain vanilla," Barrett told 精东影业. "Even though we had the strong 2025, we made investments this year in our people in terms of some of the biggest general wage increases in union contracts and also giving non-union employees raises to attract and retain talent by making Cleveland more competitive with surrounding cities.
That included a 3% across-the-board raise, and a 21% pay bump for firefighters as part of their new three-year contract.
The growth in revenue 鈥� about 3% higher than the year prior 鈥� can be attributed to a variety of factors, including a bump in tax income as the city stabilizes its population after decades of decline.
"There's also savings due to some vacancies as well," Barrett said. "Obviously we want to fill those positions, but when we budget for salaries and then we don't pay them out, that's a source of savings as well."
The city brought in an additional $21 million by outsourcing emergency medical services billing to a third-party contractor, which accelerated collection of outstanding bills from prior years.
Even with those savings and additional dollars, the city is presenting a budget to council with recommendations to continue to protect the city's "rainy day" fund. Last year, that fund was sitting at about $67 million, which grew to $69 million through interest earnings. The cap is based on the appraised value of operating revenues, meaning the city is capped around $80 million.
That means there's still room to grow, Barrett says, but he said the city is not explicitly putting more money toward it due to interest earnings.
"It's important for us to have a strong rainy day fund," Barrett said.
Barrett, who was appointed in November 2024, is continuing to look for ways for the city to tighten its belt. This year, he's revamping the way the city funds contract spending: rather than financing projects from the jump, he advised the city to use available cash via carryover funds to pay for projects and finance them at the end of the year to save millions in interest over time.
He's also hoping to bring Bibb's vision of "modernizing City Hall," an ongoing campaign promise since Bibb was elected to his first term in 2021, to the finance department. That includes streamlining invoicing and making electronic payments more readily available.
"We want to encourage folks to make it as easy as possible to do business with the city and to develop here," Barrett said.
City Council will begin budget hearings on Feb. 17 to vet spending and advocate for reconciliation to accommodate members' priorities. The city charter mandates a finalized budget by April 1.
