From Staff Reports

ASHEVILLE, N.C. — Asheville faces a “significant” $30 million budget shortfall for fiscal year 2027 “due to higher expenses — health care, debt, post-hurricane recovery — and slower revenue growth, especially from sales tax,” triggering city officials to begin budget talks early to address the gap, “exacerbated by using one-time funds in FY26 and a looming property value revaluation,” AI Overview noted on Jan. 17.

To that end, Asheville City Council “received a sobering update on the city’s financial outlook during its Jan. 13, work session, revealing a projected $30 million gap between revenue and expenses for the 2027 budget,” Asheville television station WLOS (News 13) reported on Jan. 14.

“Director of Finance Tony McDowell attributed the shortfall to factors like rising health care costs, slower sales tax growth, and the lingering financial impacts of Helene,” News 13 stated.

“Other factors like the results of the county’s re-evaluation of property values will be part of our ongoing assessment,” News 13 quoted McDowell as saying.

The TV station added, “The city’s presentation also noted other expenses, including the need to execute a new transit contract, provide security at community centers, and budget for filled positions at the Asheville Police Department.

“McDowell said starting the budget process six weeks in advance with city council allows for more transparency and collaboration as they work toward solutions ahead of the June budget deadline,” News 13 stated.

Further, News 13 quoted Asheville resident Chris Peterson, who was in attendance at the Jan. 13 council work session, as saying afterward, “I’m shocked. I knew we had a bad budget deficit...” but it was worse than he thought.

He added, “I came here a year ago, told them they better start cutting their budget.” but city leaders did not heed his warning.

In a separate interview with the Daily Planet, Peterson said he was the one who alerted News 13 about the budget meeting.

AI Overview added, “This (future budget) shortfall represents one of the most severe financial challenges the city has faced in recent years, with some council members comparing its severity to the Great Recession.”

As for proposed solutions and next steps, officials have noted that there is “no low-hanging fruit” for cuts, meaning significant service reductions or tax increases may be necessary. 

Regarding potential tax/fee boosts: officials indicated that they anticipated property tax increases and rate adjustments for utilities, such as water and stormwater, are under consideration.

As for strategic alternatives, council members have suggested exploring the sale of underutilized assets, renegotiating existing contracts, and pausing select programs.

With regard to the budget timeline, “the city began its budget process six weeks earlier than usual to allow for more transparency,” AI Overview noted.

 Public input is scheduled to begin on Feb. 10, with the city manager’s proposed budget expected in May and final adoption in June.