MIDDLEBURY — The Middlebury selectboard on Tuesday, Jan. 7, will continue to revise a draft fiscal year 2026 municipal budget of $14,548,535 that reflects a 6.9% increase in spending, compared to this year’s voter-approved spending plan of $13,607,827.

The proposed $938,708 increase in spending is largely associated with a handful of non-discretionary major budget drivers, according to the town’s financial management team, led by Director of Administration Crystal Grant, Assistant Town Manager David Sophrin and acting Town Manager Tom Hanley.

The FY’26 budget drivers include:

• A $227,532 increase in contracted employee benefits, largely driven by another double-digit jump in health insurance premiums, accounting for $130,636 of the increase. Middlebury’s FY’25 outlay for employee benefits is $1,853,100, a sum that’s pegged to rise to $2,232,169 next year.
• A $113,300 bump in employee wages, also governed by contract.
• A $178,462 increase in debt service. The town will be retiring debt on past capital projects — such as the Middlebury Police Department headquarters — but that will be more than offset by a scheduled $326,195 interest payment on the $17 million Ilsley Library expansion and renovation project. Middlebury taxpayers are currently slated to take on around $4.4 million of that debt.

Other notable proposed increases, according to the latest budget draft, include a proposed $107,449 bump for the police department, which among other things is reestablishing its police dog program and is finally able to fill a few longstanding patrol vacancies; and a $305,369 increase (14.2%) for public works services, reflecting wage increases and summer/winter maintenance costs.

The selectboard tentatively plans on using $821,140 from the Cross Street Bridge fund to help soften property taxes for local residents for FY’26, though that number could still change before the FY’26 budget is finalized. The Cross Street Bridge fund is fueled by revenues from a local option tax the voters agreed to create in 2008 to help pay off debt on the $16 million Cross Street Bridge project. The 1% taxes on rooms, meals, sales and alcohol has been generating more than $1 million annually, substantially more than is needed for debt service and maintenance of the span. The Cross Street Bridge reserve fund currently contains around $1.4 million.

Annual debt service and maintenance for the Cross Street Bridge is around $1 million. And Middlebury College is contributing $600,000 annual to the debt services.

The selectboard, with voter permission, has only tapped local option tax surplus money for capital projects, such as roads, bridges and public building improvements — such as the upcoming Ilsley makeover.

If approved with no changes, the current FY’26 budget draft would require an increase of 6.6 cents — or 7.44% — in the current municipal tax rate of 88.9 cents per $100 in assessed property value. The new municipal rate would be 95.56 cents.

According to town officials, the 6.6-cent increase would add $198.50 next year to the tax bill of the owner of a $300,000 home in Middlebury.

It should be noted that municipal taxes are but a fraction of the local, annual levy. School taxes make up the biggest portion of overall bill. Middlebury currently has a residential property tax rate of $2.8353 per $100 in property value, and a total non-residential rate will be $2.6971.

Two-thirds of all resident homeowners in Vermont receive an income-based property tax credit each year on their education tax, so the toll would be lower for many Middlebury residents.

The Middlebury selectboard will continue to take public input as it refines the FY’26 municipal spending proposal. Plans call for the panel to adopt a final draft on Tuesday, Jan. 28, that will be put to voters at the annual town meeting on Monday, March 3.

John Flowers is at [email protected].