Asheville – Former Asheville Vice Mayor Chris Peterson attended the early public hearing for the City of Asheville’s 2025-2026 budget, although a draft of the proposed budget was not available online. The hearing advertisement offered various participation methods, but this format limits public input to budget additions, making it difficult for citizens to identify waste or issues with the budget. Peterson noted the challenge of relying on news stories based on city PR statements for insights.
Finance and Management Director Lindsey Spangler shared a few budget highlights, noting that staff would start with a continuation budget based on last year’s $249.6 million budget, followed by pie charts for revenue and expenditures without specific numbers.
Property taxes made up just under one-half of revenues; sales and other taxes accounted for one-quarter; and fees and charges represented one-eighth. Everything else fell under intergovernmental or other sources. About two-thirds of expenditures were on personnel, and one-tenth was allocated to debt. Other than Helene recovery, the only expenditure highlight was “unavoidable cost increases for employee health insurance and state-mandated retirement.”
A recent release from the City of Asheville estimated that Helene had caused $1 billion in damages to city-owned assets. Peterson concluded that Asheville was in a recession. “The storm pulled the curtain open on how dependent we were on tourism,” he said later. He estimated that Helene had displaced 10,000 people, which would be around 10% of the population, and he expected these were mostly young adults.
That could be a silver lining for the housing crisis, except estimates of total homes lost run around 1,100. It was further estimated that 80% of River Arts District businesses were gone, and Biltmore Village is still under reconstruction. Peterson estimated that the building he used to own in the RAD lost 80% of its value due to Helene.
The city center had lost 127 businesses, and two had just closed. Peterson said Helene was “the perfect storm hitting at the perfect tourist season.” Hospitality businesses lost tourism dollars from the leaf season through Christmas. Potential customers were unable to navigate the interstates and local roads, while other cities offered more than closed attractions, restaurants with limited menus, and hotels without running water. High rates of business closures will likely continue for a while, making it difficult to estimate the impact of the devastation on the tax base.
The city expects an $18 million revenue shortfall for the current fiscal year, with losses from enterprise funds, including unbilled water service, missed booking fees from canceled Civic Center shows, unsold bus fares, and unused parking spaces. Sales tax and related fees are projected to decline by $1.5-$2 million.
To aid recovery, the Department of Housing and Urban Development awarded the city $225 million. Last November, voters approved $80 million in bond revenues for parks and recreation, multimodal transportation, public safety facilities, and affordable housing. The $75 million in bonds approved in 2016 for parks, transportation, and housing has already been spent or obligated.
Peterson noted that flyers were distributed at the meeting suggesting either a 3-cent or a 6-cent property tax hike while releases from the city expressed hope for receiving more state and federal funds. Peterson had a different idea.
“I’m not trying to alarm anybody. I’m trying to be truthful. This is probably the hardest budget that’s been before council in my time. It’s a test of hard love. You have to tell a lot of people we’re not going to be able to pave the city in gold. You have got to start laying people off, you can’t have any more wage increases, and you’ve got to have a hiring freeze.”
Peterson attributed Asheville’s lack of resiliency to its undiversified economy. For the long term, he said, “Corporations. You don’t like them. You need them.”
For this year’s budget, he wanted to see the city council set priorities and budget accordingly. He suggested ideas such as getting the Army Corps of Engineers to “floodproof” the rivers, keeping water revenues within the water system, finding more affordable ways to take symbolic action, and considering arbitration instead of lawsuits.