City manager presents FY26 recommended budget with $2.4 billion total and $16.3M proposed employee investments

Tucson City Manager presented his first recommended budget for fiscal year 2026 during the April 22 council study session, proposing a $2.4 billion citywide budget with roughly $750 million in general fund spending and an emphasis on employee pay and retention.

The recommended budget includes $16.3 million in general fund employee investments for FY26, continuation of a multi-year compensation plan, market adjustments for multiple classifications (including Tucson Fire and Tucson Police), and an in‑range pay placement process. The manager also recommends a change to the city’s reserve policy, replacing a percentage-based rainy day reserve with a flat $142 million general fund policy reserve and a package of $6.6 million in proposed new revenues (public utility tax options, a higher hotel-motel surcharge, possible naming-rights proceeds for the Tucson Convention Center and other fee changes).

Why it matters: the package is presented as a “balanced” FY26 recommendation but occurs amid several revenue pressures — a…