City staff opened a public budget hearing by summarizing the proposed fiscal year 2025–26 trial budget and the rationale for specific revenue and spending strategies.

The presentation said recent state-level changes have reduced local revenue: “the state eliminated the ability for cities to collect residential rental sales tax, and they also lowered the individual income tax rate,” a staff presenter said. To offset those losses, the transcript notes the City Council voted on March 18 to increase the transaction privilege tax (TPT) rate from 2.3% to 2.8%, effective July 1, 2025.

Major budget priorities described in the trial budget include additional funding for the Phoenix Fire Department to reduce emergency-response times, $4.5 million in general-fund resources for the Office of Homeless Solutions to replace ending federal pandemic-era support, and a $5.6 million non-general-fund addition for the Water Services Department to fund reopening the Cave Creek Water Reclamation Plant.

Why this matters: staff framed the trial document as a “road map” for balancing estimated resources with projected expenses ahead of council adoption. The presentation reiterated that the trial budget was presented to the council on May 6 and was voted on May 21, with legal adoption scheduled for June and the property tax levy ordinance adoption scheduled for early July (all dates were described in the staff remarks).

Other budget strategies described: reprioritizing the general fund to reduce expenditures without cutting core services, setting aside projected resources to balance future budgets, and using excise-tax proceeds to finance large public safety capital projects (the presentation listed two new fire stations and additional apparatus as examples).

What the article does not claim: this hearing recorded public input and departmental explanations; no new ordinances or final budget adoptions were enacted at this hearing. Specific line-item appropriations and final adoption remain council actions to be completed in coming weeks.

Ending: Staff encouraged attendees to review materials posted online and at room kiosks and to submit feedback; a city representative said summaries of comments would be distributed to all council offices.