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Douglas council adopts tentative budget ceiling, holds property tax rate steady amid state revenue uncertainty
Summary
The Douglas Mayor and Council set the tentative FY2026–27 spending ceiling and approved associated ordinance placements and first readings while keeping the property tax rate at $1.0783 per $100 of assessed value; members cited a possible $250,000 reduction in shared state revenues that could affect final allocations for employee raises and public safety pay.
Douglas — The Mayor and Council on June 10 adopted a tentative budget spending ceiling for fiscal year 2026–27 and placed several ordinances for first reading while maintaining the city’s property tax rate at $1.0783 per $100 of assessed valuation.
City Treasurer Alejandro Martinez told the council that, although the tax rate would remain unchanged from the prior year, the total levy would rise from $724,941 to $750,838 because of higher assessed values and new construction. He said a Truth in Taxation hearing was held April 22, 2026 as required.
The finance committee recommended modifications to the City Manager’s proposal that the council incorporated into the ceiling: excluding employees at or above pay grade 33 from the universal 3% cost-of-living adjustment and redirecting savings to provide an additional 2% for entry-level sworn police and fire personnel. With committee changes the proposed all-funds tentative budget is $107,973,928 and the general fund ceiling is $23,035,675, including transfers. Council voted 5–0 to set the higher spending ceiling the finance committee recommended.
Treasurer Martinez warned the council of an emerging state-level change that could affect shared revenues used in municipal budgets. He said state budget adjustments tied to recent legislative actions and the incorporation of San Tan Valley into the revenue-sharing pool could reduce Douglas’s shared revenue by an amount in the vicinity of $250,000; the timing and final magnitude remained uncertain. City Manager Ana Urquijo said more clarity from the state was expected by the following Monday.
The council and staff emphasized that the June 10 action establishes a maximum spending ceiling; the final budget — including exact allocations for COLAs, one-time bonuses, and the proposed 2% for entry-level sworn staff — will be adopted after a public hearing at a later special meeting. Mayor Jose Grijalva and Finance Committee Chair Council Member Ida Pedrego both said supporting public safety compensation was a council priority, while urging continued budgetary caution given the state uncertainty.
The council’s motion to adopt Resolution No. 26-1739, which set the tentative estimates and scheduled the public hearing for the final budget, passed unanimously. The city’s next formal step is to hold the public hearing on the final budget and make any allowable adjustments within the adopted ceiling.
