Commission backs proposed FY 2025–26 tourism fund budget with conservative bed-tax forecast

The Scottsdale Tourism Development Commission voted to recommend the proposed fiscal year 2025–26 tourism development fund budget, endorsing staff’s revenue forecast and the package of one-time and ongoing expenditures presented by the city’s budget analyst.

A budget analyst summarized the proposed plan and said staff adjusted the current-year forecast and the next fiscal year’s revenue assumptions after reviewing preliminary bed-tax receipts. The analyst said staff adjusted the current-year forecast to about $33.8 million and proposed a conservative bed-tax revenue estimate of about $33.0 million for FY 2025–26, reflecting a flattening trend after post‑COVID spikes.

The proposed budget includes several notable items: a $600,000 allocation in FY 2025–26 (and a matching $600,000 in FY 2026–27 as directed by council) for the Scottsdale Museum of the West; a placeholder for a Scottsdale Arts financial participation increase (staff described a $393,000 request but said the proposed budget currently contains a placeholder of roughly $292,000 and an additional $100,000 for a Scottsdale Arts strategic plan); an internal destination-marketing increase staff described as approximately $4,300,000 to realign allocations with Financial Policy 10 (the percentage split for marketing, events and transfers); and smaller one-time items including wayfinding/signage and Old Town entertainment funding.

Staff also noted smaller revenue assumptions: increased Princess lease income (about $400,000 higher than prior) and an expected modest decline in interest earnings (about $100,000). The analyst described an unusual near-zero balance remaining in the short-term rental (STR) program line—about $8,800—attributable to a reallocation of personnel costs after voter measures and internal funding shifts. The analyst explained those moves were a result of interactions among Proposition 490 (park and preserve tax) and Proposition 207 (Smart and Safe Arizona fund) allocations, which changed how certain park rangers and STR enforcement costs are funded.

Commissioners asked clarifying questions about the forecast approach, the conservatism of the revenue estimate and the STR line item. After discussion a commissioner moved that the commission recommend the proposed FY 2025–26 budget; the motion was seconded and approved by voice vote.

Staff said the proposed budget package and related transfers will move forward to the city’s budget process and ultimately to City Council for appropriation.