Layoffs will be unavoidable if the Reading administration’s proposed 9% property tax increase for 2026 is reduced, city officials said.

During a budget review session Monday, Jack Gombach, city managing director, told City Council that rising costs, driven almost entirely by contractual and mandatory expenses, leave little room for cuts that don’t affect personnel.

“Any deviation from the proposed tax increase would result in some form of layoff,” he said, noting that personnel costs make up roughly 70% of Reading’s total budget.

The administration is proposing a combined property tax rate of 19.761 mills for 2026:

• 19.261 mills for the general fund.

• 0.30 mill to support the shade tree commission.

• 0.20 mill to support the Reading Public Library.

This means the owner of property assessed at $100,000 would pay a tax bill of $1,976, an increase of about $163, or 9%, per year over the current rate of 18.129 mills.

If approved, it would be the city’s first tax hike in four years.

City Auditor Maria Rodriguez argued last month that Reading could reduce the increase to 6% without harming operations.

City auditor disputes proposed tax increase [Updated]

However, Gombach told council that even if all discretionary spending was eliminated, a substantial tax increase would still be needed.

City administrators, he said, are already examining what staff reductions would look like if the tax hike is scaled back.

Gombach said Mayor Eddie Moran does not want broad layoffs, but the city cannot close its structural deficit without either additional revenue or personnel cuts.

The administration is modeling different scenarios, he said, ranging from 20 to more than 50 job cuts.

Asked by Council President Donna Reed whether these reductions could be absorbed through retirements or natural attrition, Gombach said no such attrition is expected.

Any layoffs would need to occur before the end of the year to realize budget savings in 2026, he noted.

Council members expressed concern about cutting staff, particularly given the city’s reliance on core services.

Gombach acknowledged the impact such reductions would have but said there are few alternatives.

Because 90% of the city’s cost increases stem from wages, benefits and mandatory minimum staffing for police and fire, he said, there isn’t much left to trim.

Before proposing the tax increase, Gombach said, administrators implemented several cost-containment measures, including requiring written justification for all position backfills and prioritizing only critical vacancies.

The city is also examining reassignment opportunities, consolidation of roles and the potential elimination of what Gombach called nonessential functions.

Directors have also been instructed to work with the purchasing department to renegotiate vendor contracts and seek other operational efficiencies.

The capital budget has already been cut back significantly from earlier proposals, he said.

Still, Gombach warned that cutting projects or equipment will only buy time and will not address the structural deficit that grows by roughly $4 million each year.

Reading is not alone in facing steep financial pressures, he said.

“Communities across Pennsylvania are feeling the same pressures that we’re feeling,” Gombach said, noting that some municipalities are considering consolidation, outsourcing or far larger tax increases.

Short-term, he said, the proposed tax hike would stabilize finances and prevent tapping reserves.

Long-term stability depends on increasing the city’s tax base, Gombach said, and renegotiating major labor contracts, which he described as the single most impactful way to address wage growth and rising overtime costs.

Council will continue budget meetings before voting on a final 2026 spending plan in December.