The city council approved the 2026 budget, with Councilman Bob Scott the lone no vote.
“I spent a fair amount of time looking at the budget. I know a lot of work went into it. I have concerns about revenue projections for 2026. I would have liked to see them a little more conservative than what they are and I’m having trouble getting my arms around it. I would vote no at present,” Scott said.
The 2026 budget anticipates income tax revenue of $58.1 million. It makes up about 76% of the general fund revenue, with 13% coming from property taxes.
Income tax revenue in 2025 is an estimated $56.6 million, down $1.6 million from the $58.2 million budgeted.
“Income taxes and income tax revenues were lower than original estimates this year,” Greeson said. “This was largely driven by less corporate net profits, which were down significantly, while at the same time withholdings of employee wages were up over 4% through November.”
Kettering will have a $1 million operating margin, which means that in 2026 anticipated tax revenue exceeds proposed personnel, operating and capital equipment expenditures by that amount, Greeson said during his budget presentation.
“Income tax represents the vast majority of our annual revenue, as you know, so a continued focus on economic development is a priority and extremely important to this city,” he said. “In 2026, we will be placing even more emphasis on business retention, recruitment.”
The city plans to spend about $83.3 million in 2026, with the largest amount going to public safety.
‘Significant financial challenges’
Operating expenditures will be down compared to 2025, which had a number of unique, one-time expenditures: replacements of equipment destroyed in a fire using insurance proceeds and funding a comprehensive plan, parks master plan, five-year lease on police body worn cameras, Tasers and related software; and software updates, he said.
“However, the forecast indicates a few significant financial challenges that are ahead,” Greeson said.
The city is planning to draw down capital improvement and general fund reserves to cover necessary capital improvement projects next year. The fund balances are sufficient, but over the five-year forecast it’s not sustainable, the city manager said.
Kettering will need to increase its operating margin to support capital improvement expenditures and critical infrastructure investments. This must be done through a combination of strategies, including potential budget cuts.
In addition to economic development efforts, the city will evaluate whether to fill open positions and may reduce staff through attrition. It also will assess the use and size of the city’s fleet of vehicles and will look at ways to change how some work gets done so it is more efficient and cost-effective, the city manager said.
For next year, there will be no additional full-time positions. One part-time position was added in place of a previously approved full-time post.
Department operating budgets were held to a zero percent increase, except for inflationary charges out of their control, such as utilities.
“The goal is to keep expenditure growth in line with revenue growth so that we can maintain fiscal sustainability and do what our citizens want, which is to continue providing an excellent level of services to our community,” Greeson said.
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