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City presents five‑year budget forecast; council signals intent to keep property tax levies flat
Summary
Finance staff presented a five‑year forecast showing conservative revenue assumptions after the elimination of the residential rental sales tax and a planned drawdown of fund balance for capital; council members expressed consensus to keep both the primary and secondary property tax levies flat for fiscal 2026.
Budget staff walked the council through a five‑year forecast for Glendale’s major funds at the Jan. 28 workshop and sought council direction on the primary property tax levy.
Assistant Director Amy Lindsey and Budget Administrator Jonathan Hill described the schedule for the FY26 budget process and then presented revenue and expenditure assumptions. Staff said the city’s general fund remains dependent on local sales tax (about 49% of general fund revenues in the forecast) and on state shared revenues; they noted the elimination of the residential rental sales tax reduced FY24 revenue by $13,700,000 across all funds (about $7.5 million of that had been general fund revenue).
Staff presented conservative revenue growth assumptions for FY26–FY30, including an anticipated reduction in construction sales tax beginning in FY26 as construction activity normalizes. They also said state shared income tax forecasts reflect a recently enacted flat income tax at the state level, which reduces future shared income distributions.
On property taxes, staff explained the difference between primary and secondary levies and presented options: keep the flat primary levy (the city has not increased the primary levy since FY2016), implement a statutory 2% increase to the primary levy, or otherwise change the levy. After discussion, council members signaled consensus to continue the city’s flat‑levy policy for both primary and secondary property tax for FY26; there was no formal roll‑call vote at the workshop.
Staff presented the general fund five‑year forecast, showing planned spend‑down of fund balance for capital projects (staff described these as planned, one‑time draws). Contingency for FY25–26 was shown at $5,000,000. Staff also noted a risk the legislature may change the state food‑tax treatment (staff provided the prior year food‑tax total as $21,000,000 across all funds) and said they would provide supplemental scenarios if and when legislative details are final.
Staff said the CIF (capital improvement plan) presentation will follow on March 4 and reminded council that tentative budget adoption is scheduled in May with final adoption and property tax levy action in June per the budget calendar.
