Allentown Mayor Matt Tuerk presented plans for a balanced 2026 budget with a 3.96% tax increase that he said is necessary to keep the city services and operations going next year.

If passed by City Council — which two years ago rejected a tax increase requested by Tuerk — it would be the first property tax hike since 2019.

The $246 million budget adds no new positions or major expenditures next year, but will continue to fund existing jobs and projects, including plans for a multi-million dollar police headquarters renovation, improvements to the Martin Luther King Junior Trail and traffic safety upgrades.

The city is facing financial challenges including increasing pension obligations, revoked federal funding and growing employee health care insurance costs, which is why the tax increase is necessary, Tuerk said Thursday. The city also will use $2.6 million of its general fund reserves to balance the budget.

“I want to underline what this budget represents: It’s a commitment,” Tuerk said. “This budget represents a commitment to the people of Allentown, to the people who work for our city, and to the idea that we’re all in this together. Every single person who works at our city knows why they come to work every day: to create a safe, clean and healthy environment that promotes the well being of our residents, all our residents.”

The city has had around $4.5 million in federal funding revoked since President Donald Trump took office, Tuerk said, including grants for police technology, parks improvements and infectious disease surveillance.

Tuerk’s 2025 budget included no tax increase and passed unanimously. However, Tuerk and City Council butted heads over the 2024 budget, for which Tuerk initially proposed a 6.9% tax increase. After opposition from City Council, he lowered that to 2%, which council also rejected, keeping property taxes level in 2024 against Tuerk’s urgings.

Council members who opposed the 2024 tax increase said that the city’s poor residents could not afford it, but Tuerk said then that rejecting a tax increase was “short-sighted” and could lead to future financial instability.

Asked how he planned to win City Council’s support for a tax increase that previously opposed, Tuerk said he heard “loud and clear” their concerns about the 2024 budget, and has been meeting with City Council members ahead of Thursday’s budget presentation to make the case for the 2026 budget.

“City Council got this budget last night, in time,” Tuerk said. “I’m sure that they have the same commitment to serve the residents of the city of Allentown, and that they understand exactly what we need to do to accomplish that, and what’s necessary.”

City Council president Daryl Hendricks said Thursday he had not had the chance to review the budget in full. He plans to do so in the coming weeks, and City Council also will hold a series of public hearings with department heads on the budget’s specifics beginning next week through the first week of November.

“If it is reasonable, if the increases are going to be utilized for those purposes that will be most opportunistic for the taxpayers and it’s reasonable, I would certainly support it,” Hendricks said.

Allentown most recently had a tax increase in 2019, when former Mayor Ray O’Connell vetoed City Council’s proposed budget, which did not include a tax hike, and enacted a 27% tax increase. Before that, the city had not seen a tax increase since 2005.

Allentown homeowners can use an online property tax lookup tool to learn how the proposed increase will affect them at allentownpa.gov/budget.

Reporter Lindsay Weber can be reached at Liweber@mcall.com.

Originally Published: October 16, 2025 at 2:17 PM EDT