LEBANON — Last year’s city budget drew more public scrutiny than any in recent memory as the City Council struggled to strike a balance between reducing the high tax rate and preserving city services.

This week, the City Council will formally kick off the 2026 budget process at a special meeting Wednesday night.

At the meeting, which starts at 5:30 at City Hall, the councilors are set to hear public input and vote on a 2026-2029 strategic plan, discuss the city’s updated financial outlook and direct staff on which budget options to present to the council for next year.

As a starting point for discussions, Mayor Doug Whittlesey has proposed that city staff prepare three budget options: one that does not add or eliminate any positions or city services, which would result in a projected 7.5% tax rate increase; one that keeps pace with inflation, which last year was 3.2%; and an option halfway between the two.

The council is scheduled to vote on Whittlesey’s recommendation on Wednesday.

Whittlesey said via email Tuesday that the three options are “more of a suggestion to the council to spur discussion and thought.”

The council will work throughout the year to finalize the budget in December.

The 2025 budget ultimately delivered a 7.8% tax increase.

Last year, City Manager Shaun Mulholland projected property tax rate increases of greater than 10% municipal annually for the next several years.

Now, Mulholland estimates the annual increases will be closer to 7.5%.

Those new projections are based on the assumption that the $800,000 in cuts the City Council made last December remain in place, Mulholland said.

The projections also hinge on the city continuing to transfer money from a special tax district to the general fund every year. In the 2025 budget, the amount was $300,000.

“Otherwise it would create a hole in the budget,” Mulholland said.

Some of the factors the council will have to consider are financial unknowns, such as the biennial state budget that is being negotiated in Concord and other bills in the legislature related to municipal insurance and landfills, Whittlesey said.

The city also is working on a property revaluation that is scheduled for completion in October.

Clare Shanahan can be reached at cshanahan@vnews.com or 603-727-3216.