Allentown City Council officially approved its 2026 budget with a nearly 4% tax increase and a $135 increase to the city’s trash fee, ending two weeks of uncertainty about the budget’s status.

The vote Tuesday night was 4-3, with President Santo Napoli, Candida Affa and new members Cristian Pungo and Jeremy Binder casting decisive votes in favor of the spending plan. Members Cynthia Mota, Ce-Ce Gerlach and Natalie Santos voted against it.

The city’s 2026 budget was due Dec. 31, but an impasse between City Council and the city administration left the budget in limbo until Tuesday night.

In comments before his vote, Binder called the budget vote a “lose-lose situation,” and said that he hopes council and the administration avoid a budget impasse in the future.

“When I ran for this opportunity, I did so because — with the understanding that voters across the city were frustrated with the lack of cooperation and compromise between the administration and City Council,” Binder said. “We are dealing with a 2025 issue right now. It’s 2026. I would encourage both my colleagues and the administration to begin anew. We have the opportunity to do great things, but we need to work together, and I’m eager to get past this setback.”

The plan approved by council is the one introduced by Mayor Matt Tuerk in October. A slim majority on City Council rejected that spending plan and a later compromise proposal that would have kept the 3.96% tax increase, but lowered the trash fee increase to $90.

Tuerk and city Finance Director Bina Patel said the increases are necessary to cover rising costs, including a 5% increase in the city’s trash contract and 3% raises for all of the city’s unionized employees. However, council members who opposed the plan said poorer residents could not afford both a trash fee increase and tax increase in the same year.

Council instead passed a budget with no tax increase, which Tuerk then vetoed, saying the tax increase is necessary to keep city services operating. Council on Dec. 30 failed to override Tuerk’s veto. That left the city without a budget approved by council for 2026.

Tuerk maintained that the failed override vote left intact his original budget proposal. However, council solicitor Maria Montero said the city had no official budget for 2026, pointing to a 2019 Allentown voter referendum in which 83% of voters approved a change to the city charter that prevents a mayor’s budget from going into effect by default without approval from City Council.

Tuesday night’s vote should put to rest any lingering concerns about the legality of the budget.

“We had a budget but there was a lot of — the clarity was not there, regarding if can we have a default budget, but the council also did not provide any other budget besides the mayor’s budget, so we ended up with the mayor’s budget,” Patel said in an interview Wednesday. “They approved that budget yesterday, and I am happy to see that.”

Council approved a series of minor amendments to the budget Tuesday, including adding a deputy human resources director, reclassifying several jobs within the Community and Economic Development Department, and boosting that department’s funding by $100,000 to address homeless issues.

However, it is unclear if the compromise proposal with the lower trash fee increase is still on the table.

Patel introduced that compromise proposal after council rejected Tuerk’s initial budget. The plan would have included a $2 million transfer from the general fund to the city’s solid waste fund, which would be paid back over a period of five years, to cover the cost of the city’s contract with waste hauler J.P. Mascaro and Sons.

However, some council members said they were concerned that the 3% interest rate of the loan — which is set by TD Bank, the city’s banking provider — would set the city back financially in the long run. Taxpayers would still be on the hook for the increasing cost of the city’s trash contract, and would end up paying for both the 5% increase in the cost of the contract, and the interest rate of the loan, at some point in the future.

“The concern is, ultimately we are still charging everyone the same amount, effectively charging more because we are putting interest on top of this,” Binder said.

Binder said he plans to introduce a resolution at council’s next meeting that would outline specific procedures should council be unable to come to an agreement on the budget in the future. That resolution would avoid the situation council faced this year, he said.