Phoenix manager proposes $6.9 billion FY25-26 budget as council and public press for more fire and homelessness funding

City Manager Jeff Barton presented the proposed fiscal 2025-26 operating budget to the Phoenix City Council policy session, outlining a $6.9 billion citywide spending plan and a $2.2 billion general fund that city staff say is structured to preserve services amid shrinking revenues and legislative uncertainty.

The proposal divides the operating budget roughly into three parts: about 32% general fund for core services, 33% special revenue funds (including voter-approved funds and grants), and 35% enterprise funds such as water and airports. Staff said local sales and excise taxes are the largest single revenue source (about 43%), with state-shared revenues and property taxes also contributing substantial shares.

Council members and public commenters focused much of the discussion on public safety and homelessness funding. The proposed budget includes approximately $34 million in supplemental additions targeted largely to the Phoenix Fire Department, including converting 32 sworn positions previously funded by a SAFER grant into ongoing general-fund positions (described in the presentation as costing roughly $2.5 million next year and $5 million ongoing). The proposal also includes pre-hiring costs for a new station (described as 24 positions with roughly $2 million partial-year and $4 million ongoing costs) and additional long-term commitments the city described as intended to increase sworn hiring targets and reduce emergency response times.

The city manager and budget staff said those fire investments, plus bond-funded stations approved in the 2023 general obligation bond program, are intended to increase the fire sworn hiring target from the current hiring target to a higher level over the next several years; staff projected specific sworn hires and cited a multi-year plan to improve localized emergency medical response times.

Staff said the proposed budget responds to an earlier projected deficit and to state actions that reduced local revenues. The presentation recapped a previously identified projected general-fund deficit of about $39 million and outlined mitigation strategies the council had approved earlier, including raising the transaction privilege tax (TPT) rate (staff stated the council previously approved an increase from 2.3% to 2.8%) and issuing an excise-tax-backed bond sale for public-safety capital. City staff said they planned to set aside a portion of expected TPT proceeds (described in the presentation as about $92 million in the earlier forecast) to shore up the fund balance for fiscal 2026–27.

Budget staff described additional items in the proposal: administrative conversions of temporary positions to ongoing status (a list of 38.6 full-time-equivalent conversions was referenced), $2 million in one-time ARPA interest earnings proposed for the housing trust fund, and a $5.6 million supplemental for Water Services to reopen the Cave Creek Water Reclamation Plant and add staff and vehicles. Staff said departments identified roughly $24 million in reprioritized reductions across non-personnel line items and 18.2 vacant positions in order to preserve direct services while freeing resources for higher-priority needs.

The city manager and budget director told council members staff had engaged the public in 12 community budget hearings and received 440 comments from 402 residents, including requests to preserve services, add fire resources, expand eviction legal assistance, and continue homelessness programs. Staff recommended the council adopt the proposed budget timeline: vote for legal budget adoption at the May 21 meeting, tentative adoption on June 4, final adoption June 18, and property tax levy adoption July 2.

Council members asked for follow-up information on several topics raised during the hearing: the city manager and budget office agreed to deliver detailed sworn and non-sworn wage-and-benefit projection reports, a list of federal programs at risk from proposed federal cuts, and grant specifics for environmental and heat-response programs. Staff also confirmed that if significant federal or state funding is lost, the city would return to council with proposed changes; staff said the $17 million one-time amount identified in the proposal would be held in reserve to provide flexibility against such uncertainties.

Public speakers at the meeting included union representatives and firefighters who urged additional and faster fire investments; the city manager reiterated that the proposed budget includes additional resources and that some station projects are tied to the 2023 bond program and will come online over multiple years. Multiple speakers also emphasized the immediate consequences of response-time gaps, particularly for downtown high-rise response and for areas with large unhoused populations.

No final budget vote occurred at the policy session. Staff presented the proposed plan and documentation to the council and committed to returning with legally required documents and follow-up details at the stated timeline for adoption.