Meridian and Ada County are both exploring property tax increases for the upcoming fiscal year, with city officials in Meridian proposing a 3% hike alongside a partial recovery of forgone taxes to cover rising employee costs, a downtown parking project, and a shift to in-house prosecution services. The proposals come as the region’s rapid growth era shows signs of cooling — and as the fiscal pressures of that growth catch up with local budgets.
Meridian Faces Revenue Squeeze Despite Strong Growth
For much of the past decade, Meridian has benefited from explosive population growth that generated substantial new construction revenue — as much as $4 million annually five to seven years ago. That pace has slowed considerably. Overall city revenues dropped roughly 3.8%, or about $6.3 million, compared to earlier projections. Sales tax receipts came in 9.26% above initial estimates, a bright spot, but liquor sales revenues fell 8.62% short of projections.
Meridian Chief Financial Officer Todd Lavoie acknowledged the shift during recent budget deliberations, noting that the city remains financially sound but that expectations need to be recalibrated. “We’re still very healthy on a growth standpoint, but we just got used to some really big numbers five, six, seven years ago,” Lavoie said. “I think those days are behind us.”
The proposed 3% property tax increase would raise the city’s levy rate from 0.00197 to 0.00198 — a modest adjustment in numeric terms, but one that reflects genuine strain on city finances. In addition, Meridian is considering accessing 1% of its forgone tax balance, the maximum Idaho law allows for ongoing operational expenses. Under Idaho’s House Bill 389, passed in 2021, local governments face caps on how much property tax revenue, new construction revenue, and forgone taxes they can collect each year. For one-time capital expenditures, governments can draw up to 3% from forgone balances.
Healthcare Costs and Staffing Drive Budget Pressure
A significant driver of Meridian’s budget challenge is employee healthcare costs, which are projected to climb 13.5% in FY2027 — well above the 8% increases seen in recent prior years and a trend officials expect to continue into the 13% range going forward. The city is also proposing a 2.76% cost-of-living adjustment for employees, roughly in line with average annual inflation.
One staffing change that drew council attention is Meridian’s transition away from contracting with the City of Boise for prosecution services. The city is moving toward building its own in-house prosecution department, initially proposed with ten new hires. After council deliberation, that number was scaled back to two new personnel for the coming fiscal year — a more measured rollout that limits immediate budget impact while still moving toward long-term independence from Boise’s services.
Downtown Parking Garage Stays in Budget for Now
Another point of discussion was a proposed $7 million city contribution toward a 300-stall downtown parking garage, to be developed through a public-private partnership. The council agreed to keep the allocation in the tentative budget as a signal of the city’s intent, while stopping short of any binding contractual commitment. No contract has been authorized, leaving the city flexibility as negotiations proceed.
Ada County commissioners wrapped up their own budget discussions in mid-June, also weighing potential tax increases as rising costs put pressure on county finances heading into FY2027. The parallel budget pressures facing both the city and county reflect a broader trend across the Treasure Valley, where the cost of delivering public services is catching up with years of rapid expansion.
Meridian’s situation contrasts with neighboring Boise, where officials scaled back a proposed property tax increase earlier this year after revenue projections improved.
What Comes Next
Meridian’s fiscal year 2027 begins October 1, 2026. The City Council has scheduled a public hearing on the tentative budget for August 11, giving residents an opportunity to weigh in on the proposed tax increases and spending priorities before the budget is finalized. Ada County’s budget timeline is running on a similar track following the conclusion of commissioner deliberations in mid-June.
Meridian homeowners and businesses who want to track the budget process or prepare comments for the August 11 hearing can monitor city meeting agendas through the City of Meridian’s official website.