Phoenix presents FY 2025–26 trial budget, cites tax increase to cover state revenue losses

The City of Phoenix on Wednesday presented its fiscal year 2025–26 trial budget at a Sunnyslope Community Center hearing, outlining a package of reprioritized spending and a recently approved tax increase the city says is needed to replace revenue lost to state actions.

City Manager Jeff Barton summarized the budget process and the city’s fiscal pressures, saying the state’s elimination of the residential rental sales tax and reductions in individual income tax rates have reduced ongoing revenue and that staff have proposed a combination of revenue and reprioritization to keep the budget balanced. "This important document is now ready for everyone to look at," Barton said during a prerecorded presentation shown at the hearing.

The presentation noted that on March 18 the City Council voted to raise the transaction privilege tax (TPT) rate from 2.3% to 2.8%, effective July 1, 2025, to generate revenue for programs and services. The city also plans to present a manager’s revised budget to the council on May 6 and to take council action on May 21, with legal adoption of the budget expected in June and the property tax levy ordinance to follow in early July.

Why it matters: The trial budget links multi‑million‑dollar proposals to both immediate service priorities and…