Get a sneak peek at Covington’s budget for the next fiscal year

Covington will vote on its budget for fiscal year 2027, which starts on July 1 and goes until June 30 of next year, in two weeks.

Mayor Ron Washington encouraged city residents to “go online and take a look at the proposed language and contact any (elected officials) or our city offices if you have questions.” You can view the full proposed budget here.

The city government has met several times over the first half of the year to discuss its budget priorities, and the city’s budget director presented the figures for the proposed budget last week.

The new budget is contextualized by the city’s previous struggles to get a deficit in its general fund, from which it draws much of its operating budget, under control. Although the city’s most recent audit suggested the deficit had closed for the first time since fiscal year 2021, it remains to be seen if this will last.

The previous years’ shortfalls were largely due to declines in payroll tax collections, following the institution of work-from-home policies during the pandemic, especially at the city’s larger employers, such as Fidelity. Payroll taxes are collected based on the location where work is completed, so if the employees worked for a Covington company but lived elsewhere, work-from-home policies ensured tax revenue was collected outside of Covington.

In time, this led to a deficit in the city’s general fund, although other city funds that don’t rely on tax revenue were not affected. Since then, the city commission has re-apportioned emergency COVID dollars—officially called American Rescue Plan Act, or ARPA, funding—and has introduced other cost-cutting measures to close the gap.

Financial records from the city indicate that just over $6 million in revenue for the general fund came from ARPA funding in fiscal year 2025, and Budget Director Joe Ewald’s presentation last week indicated the city is expecting that about $5 million will be spent from the city’s ARPA fund, less than what the city expected, in fiscal year 2026.

The ARPA program will sunset at the end of calendar year 2026, after which the funding will not be replenished, whether it’s spent or not. $5.2 million in ARPA funding is allocated for fiscal year 2027.

Maintaining city facilities and infrastructure, as well as helping city workers make cost-of-living adjustments, were the priorities for next year’s budget.

“Most of our employees are definitely punching above their weight, so we want to try to keep them here as best we can,” said City Commissioner Tim Acri. “We’re focused on roads. We put a million dollars in the budget this year for roads, which we haven’t done in the past, because our city needs the roads.”

Most of the city’s expenses come from personnel.

“We have $1.3 million in cost-of-living increases,” Ewald said. “We have another half million dollars in salary adjustments” for the upcoming fiscal year.

“We need facility improvements,” said City Manager Sharmili Reddy said. “I think this budget is still conservative, but it has a lot of investments in those things that we need.”

Other expenses to highlight include a $3.84 million allocation for debt payments. This figure includes $1.3 million to completely pay off a series of bonds from 2016. This will reduce the city’s bond payments by about $300,000 every year in the future (if the city doesn’t take on any more debt).

New major expenses include the formal creation of the city’s new external affairs department, which focuses on lobbying. That department is expected to incur about $711,000 in both personnel and non-personnel costs next year.

Lastly, other new expenses include about $90,000 for a community paramedicine program, about $40,000 for the establishment of a dog park in South Covington and about $75,000 for police drones.

The Board of Commissioners will cast a final vote on the budget at their legislative meeting on June 23.