Phoenix budget hearing previews transaction-privilege tax increase, spotlights funding for fire, homelessness, water

Phoenix officials held a public budget hearing in Council District 6 to gather resident input on the city’s proposed fiscal year 2025–26 trial budget and to explain key changes included in the city manager’s proposal. Mayor Kate Gallego and Assistant City Manager Inger Erickson opened the hearing, described the budget process, and invited public comment.

“The budget is arguably the most important vote we take each year, and the process is really important to make sure we are achieving our residents' goal,” Mayor Kate Gallego said. Assistant City Manager Inger Erickson said, “The feedback we received today is important to the city as we finalize the proposed budget.”

Why it matters: city officials and the video shown at the hearing said Phoenix faces potential structural deficits caused in part by recent state actions. To offset revenue losses the trial budget includes a mix of revenue and expenditure strategies and references a March 18 city council vote to raise the transaction privilege tax rate from 2.3% to 2.8% effective 07/01/2025. The video and staff said the rate increase is intended to generate revenue for programs and services and to help balance future budgets.

Key budget items described at the hearing and in the trial-budget video: - Public safety and fire services: the trial budget and staff materials referenced planned use of excise tax proceeds and other resources for public-safety capital projects, including two new fire stations and additional apparatus. The video said the council has included strategies to hire more firefighters and staff new or existing stations to reduce emergency response times. - Homelessness: the trial budget includes a revised estimate of $4,500,000 in general-fund resources for the Office of Homeless Solutions for 2025–26. City staff said some federal pandemic-era funding is ending, and the new estimate is intended to sustain shelter operations at sites named in public materials, including Rio Fresco, the Phoenix Navigation Center, and the Washington Shelter. - Water services: the proposed budget would add $5,600,000 to the non-general-fund budget for the Water Services Department to support reopening the Cave Creek water reclamation plant, increasing wastewater treatment and purification capacity. - Budget structure and timing: staff explained the budget process in phases: departments estimate costs year‑round, the city manager issues a trial budget in March, the council considers public input in May, legal adoption of the budget is scheduled in June, and the property-tax-levy ordinance will be adopted in early July, according to the presentation shown at the hearing.

Public commenters addressed multiple budget priorities. Speakers urged preservation of library hours in response to a reported proposed cut to the public-library budget, advocated for increased funding to shorten fire-department response times, asked for stronger park enforcement and a dedicated ranger at Hance Park, and raised neighborhood concerns about graffiti, traffic enforcement, and bicycle and transit safety. City leaders at the hearing said staff were taking notes on comments and will use community input as the city finalizes the trial budget for council consideration.

The hearing did not record any formal vote on the trial budget itself; the materials presented explained the council’s prior March 18 vote to raise the transaction-privilege tax and the schedule for later council action on the full budget and the property-tax ordinance.