Tempe staff present $1.7 billion operating and capital proposal; council urged caution over lost rental tax

Lisette Camacho, presenting to the Tempe City Council on April 24, said, "This presentation is our last budget review session before we go into the tentative budget process." She and Julie Hyder walked council through the recommended operating and capital budgets for fiscal year 2026 and the five-year capital improvement program.

Camacho said the operating and capital budgets together total $1,700,000,000 and that the recommended operating budget for FY2026 is about $875,000,000, a 7.4% increase over the prior year. She said the recommended general fund total is $344,000,000 and highlighted planned additions including three firefighters and two parks maintenance technicians; staff counted five regular full-time equivalents added overall.

The presentation listed several key budget pressures and responses. Camacho and Hyder told council that the city is planning drawdowns of fund balance beginning in FY2026 as a result of the elimination of the residential rental sales tax. Hyder summarized that…