Mesa staff outline FY 2025–26 proposed budget: $20M rental-tax loss, new fire stations and a $147M utility transfer

Mesa City staff presented the proposed fiscal year 2025–26 budget at a City Council study session May 1 and warned the council the plan reflects a roughly $20 million annual revenue loss from the state’s elimination of the residential rental tax, sizable new public-safety spending and a $147 million utility-fund transfer that supports policing and fire services.

Brian Brady, staff member, told the council, “In this budget, this is a significant budget as far as what it is bringing into or providing additional service to the city above and beyond the current level of services.” Brady highlighted several large service additions included in the proposal, notably new fire stations, a police substation and a new full-service library.

Nut graf: The presentation framed the budget as a trade-off between continuing historic service expansions — including three new fire stations, the Northeast Public Safety Facility and the Gateway Library — and offsetting structural pressures created by recent state changes and negotiated salary adjustments. Staff said the utility-to-general-fund transfer (set by ordinance) remains a central piece of public-safety funding while the city uses reserves and department reductions to bridge near-term shortfalls.

Staff and key numbers Christy Griffin, budget operations coordinator, walked the council through revenue and transfer mechanics and specific line items. Griffin said the state’s removal of the residential rental sales tax reduces the general governmental fund by “about $20,000,000 impact ongoing.” She also summarized other revenue and cost drivers staff included in the forecast: the recently enacted flat state income-tax…