Fairbanks mayor's 2027 budget comes with a warning that revenue isn't keeping up

Fairbanks Mayor Mindy O'Neall released her proposed 2027 city budget Oct. 29, and with it a warning about the city's finances.

"The root cause is that our revenues are not keeping up with rising costs," O'Neall said. "That's an issue we have to figure out soon. We can't keep expecting property owners to foot the bill alone."

The release doesn't name a new source of money.

The budget projects a surplus of about $685,750, keeps all the city's required reserves and keeps Fairbanks debt-free, according to the mayor's office. But O'Neall said revenue growth has stalled, losses in the city's Risk Fund are still affecting cash flow and the next few years will be tight.

The proposal cuts capital spending by 92.5%, from about $16.4 million this year to about $1.2 million, which O'Neall has tied to payments on an $11.5 million lawsuit settlement. Capital spending pays for construction and equipment. The city's Risk Fund, which covers claims against the city, ended 2025 about $5.2 million in the red.

Day-to-day spending in the proposal runs about $4.9 million ahead of day-to-day revenue, with a $6.1 million transfer from the city's Permanent Fund covering much of the gap. Property tax revenue would rise by about $1.1 million, to $19.4 million.

What's left of the capital budget goes first to roads and sidewalks, City Hall upgrades and the city's share of road projects.

On the operating side, the budget keeps up snow removal and road maintenance and continues work downtown, including storefront improvements and more activity and security at Golden Heart Plaza. It also continues partnerships on homelessness and behavioral health aimed at easing the load on first responders.

The city would add staff in legal support, information technology and police evidence management, and expects police and dispatch to be fully staffed next year.

The City Council has until Dec. 15 to adopt a budget. O'Neall is holding a budget town hall Tuesday evening at the Noel Wien Library.