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Tucson council adopts FY2026 spending cap; approves $250,000 one‑time PEAPS allocation
Summary
Council set the tentative FY2026 budget spending cap and approved one‑time allocations to support child‑care scholarships run by Pima County, while discussing additional revenue options and a June schedule for deeper revenue policy work.
The Tucson City Council on Tuesday adopted the tentative budget that sets the city’s FY2026 expenditure cap and agreed to reallocate $250,000 in one‑time funds toward child‑care scholarships for public safety employees, a one‑time commitment the council paired with invitations to individual council members to contribute additional office funds.
Assistant City Manager and Chief Financial Officer Anna Rosenberry and the city manager presented the tentative budget as an update based on the recommended budget from April 22 and a May 6 submission of required state forms. The tentative budget sets an overall spending ceiling the council may not exceed when it adopts the final FY2026 budget; staff said the tentative budget does not lock in line‑item allocations and allows reallocation as long as total spending does not increase.
Rosenberry said the administration proposed levying the maximum allowable property tax rate for both primary and secondary taxes, and, when combined, the city’s primary and secondary property tax rate would decline slightly — from 1.0345 to 0.9963 under staff projections. She noted the proposed budget preserves the city’s $20,000 annual contribution to the Metropolitan Education Commission but recommended that the council consider passing that payment under a separate motion that night to avoid a perceived conflict of interest for the newly seated Ward 5 member.
Council members and staff discussed a range of revenue options to close the remaining estimated budget gap. Council Member Cunningham described a package of possible revenue and savings measures — including modest KidCo fee increases, adjustments to short‑term rental bed taxes and possible utility tax changes — that he said could produce millions of dollars over time. Manager and CFO said staff will take the council’s ideas into a June 17 study session on revenue options and that public discussion would continue; the manager also noted the tentative budget includes a $22.4 million one‑time allocation connected to voter‑approved bond programs that provides additional spend capacity if new revenues materialize.
On the consent calendar the council approved a separate motion to reallocate $250,000 of previously identified one‑time funds toward PEAPS (Pima Early Education Program scholarships) to support childcare for public safety workers. The manager and councilmembers indicated additional one‑time contributions from council offices — including an offer from the Ward 5 office — would be coordinated to reach a larger, one‑year support total. Staff said the $250,000 was not given to any foundation and remains under mayor and council discretion.
Rosenberry and the city manager said the tentative budget adoption that evening sets the cap and that council would return June 3 for the final budget study session, public hearing and adoption. A June 17 meeting is targeted for additional revenue discussion, the city said.
Ending: With the tentative budget adopted (6–0), staff will proceed with outreach on revenues and return with final budget work in June; the council also authorized the manager to execute necessary agreements to send the one‑time PEAPS funding to Pima County.
