Phoenix City Council Policy Session: FY 2025-26 Budget Presentation - May 6, 2025

The Phoenix City Council met on May 6, 2025, for a policy session focused on the City Manager's proposed budget for fiscal year 2025-26. The meeting included council information items, a detailed budget presentation by city staff, public comments, and extensive council deliberation. No votes were taken; the budget is scheduled for adoption on May 21, 2025.

Council Information & Follow-Up Requests

• Councilwoman Pastor recognized Teacher Appreciation Week and highlighted several community events: Hope's Brunch House on Central Avenue, a new Veteran Service Center (three-bed emergency shelter, food/clothing pantry, health navigational assistance), a job fair on May 8 (over 100 jobs), and Bike to Work Day on May 15.
• Councilwoman Hernandez provided updates on District 7, including participation in the May Day March, the Hispanic Convocation at the Orpheum Theater (celebrating graduates amid education funding cuts), the Light Rail and Capital Extension community meetings (focusing on minimizing displacement), and youth/volunteer award ceremonies. She noted a conversation with young constituent Amelia about protecting after-school program funding.
• Councilwoman Guardado highlighted the groundbreaking of Innovation 27 (May 7, 2025), a workforce training and education collaborative including K-12 and community college programming, business space, culinary support, and union-led apprenticeship pathways. She also promoted pool parties and the 602 Day Taco Wars on June 2.
• Mayor Gallego noted that some council members wore green for Mental Health Awareness Month and acknowledged a Heat Awareness Week event earlier that day, mentioning a new 24-hour cooling space at 20 West Jackson in District 7.

Public Comments & Testimony

• Teresa Hill (online comment) expressed concerns about budget cuts to IT, fire technology equipment, and municipal court staffing, arguing that delays in IT assistance and server equipment could lead to system failures.
• Mercedes Samaria (volunteer with Rambo) urged targeted investments in Maryvale for heat resilience: shaded bus stops, cooler pavement, stormwater-absorbing materials, and shaded sidewalks. She noted Maryvale is 4–6°F hotter than other neighborhoods.
• Patrick McDaniel (Advocacy Director, Phoenix Community Alliance) supported the proposed budget, applauding additional funding for the Office of Homeless Solutions and low-income senior housing. He asked that no further cuts be made to historic preservation, active transportation, or the Office of Arts and Culture ($175,000 reduction).
• Timothy Gamage (resident, former union executive) voiced concern about the fire crisis, supporting the TPT increase but asking for additional fire engines to improve response times.
• Joshua Gonzalez Jimenez (Rambo volunteer) also advocated for Maryvale heat mitigation: cool-public spaces, engineered shade at every bus stop, cool corridors, and reflective pavement. He cited NASA surface temperatures of 120–160°F on sidewalks.
• Magdalena Avila de Marin (Rambo volunteer, Spanish and English) requested more trees, safer streets, lighting, shade, solar panels, and a community heat plan for Maryvale, noting extreme heat deaths.
• Christopher Pierre (Phoenix firefighter) stressed life safety, citing high burn incidents among unhoused individuals and unsprinklered high-rise buildings. He thanked the council for the TPT increase and balanced budget.
• Ann Ender (resident, retired) noted police staffing at 2,485 sworn (30 officers per shift for 1.7 million people) and expressed support for public safety funding.
• Daphne Cortez (Rambo organizer) requested dedicated funding for a community heat planning effort in Maryvale, including cool corridors and partnerships with the Office of Heat Response and Mitigation.
• Valerie (resident) compared Phoenix’s investment to other cities, stated there were over 600 heat-related deaths in Arizona in 2024 (52% increase from 2022-2023), and called for investment in Maryvale.
• Amanda Kaminskis (supporter of unhoused neighbors) witnessed heat-related hallucinations and deaths at bus stops, advocating for parks, trees, drinking fountains, shade, and improved walkways in Maryvale.
• Orla (unidentified speaker, possibly firefighter or resident) criticized the city for not fast-tracking fire stations from the 2023 GO bond, calling the response time crisis a “10-year” issue and accusing the city of criminal negligence.

Budget Presentation (City Manager Jeff Barton & Budget Director Amber)

• Proposed FY 2025-26 Operating Budget: $6.9 billion total, including $2.2 billion General Fund (32% of total), $2.3 billion special revenue funds (33%), and $2.4 billion enterprise funds (35%). General Fund breakdown: 62% public safety (police/fire), 11% community enrichment (parks, libraries, human services), 11% general government, 7% criminal justice, 9% contingency/rainy day.
• General Fund Revenue Sources: 43% local sales/excise taxes, 35% state shared revenues, 12% property taxes, 10% user fees/other.
• Deficit Projection: A $39 million deficit for FY 2025-26 was presented on March 18, 2025, due to state elimination of residential rental tax (Jan. 2025), individual income tax rate reduction to 2.5%, and increased operating expenses. Council-approved strategies: increasing the Transaction Privilege Tax (TPT) from 2.3% to 2.8% effective July 1, 2025; excise tax bond sale for public safety capital; and $24 million in reprioritized cuts (18.2 vacant positions, no filled positions, no direct service impacts).
• Supplemental Additions ($34 million): $2.5 million to convert 32 fire positions from SAFER grant to General Fund; $2 million for pre-hiring 24 sworn at new Fire Station 15 (43rd Ave & Camelback); $4.5 million for Office of Homeless Solutions moving to General Fund; $25 million ongoing for 134 additional fire sworn and 19 civilian staff to reduce response times (local EMS 8:30 to 4:25 minutes; hiring target from 1,865 to 2,023).
• Other Provisions: $2 million from ARPA interest to Housing Trust Fund; $5.6 million for Cave Creek water reclamation plant expansion; administrative conversions of 38.6 FTE (funded from existing savings).
• Resident Engagement: 12 community hearings (April 1-16); 440 comments from 402 residents; support for preserving services, additional fire funding, eviction legal assistance, heat relief, street/bike improvements, libraries, parks, arts.
• Next Steps: May 21 – budget vote; June 4 – tentative adoption; June 18 – final adoption; July 2 – property tax levy adoption.

Discussion Items

• Councilwoman Hodge Washington praised affordable housing funding and eviction legal assistance. She asked about potential federal budget impacts; Amber cited possible cuts to LIHEAP ($1.3M), CSBG ($1.8M), housing for people with AIDS ($500K), CDBG landlord/tenant ($244K), CDBG shelter ($2.2M), for a total of ~$14.4 million and 62 positions (though Head Start not in president’s budget). City Manager noted the $17 million projected surplus would be set aside for uncertainty, but any major federal cut would require offsetting reductions.
• Councilwoman Hernandez asked about cuts to the Office of Environmental Programs (not cut; General Fund actually increasing by $400,000; decline due to un-awarded climate grant and expiring ARPA). She requested a list of programs vulnerable to federal cuts. She expressed concerns about the 46% increase to the police budget ($1 billion total), noting while community services remain underfunded. She asked for sworn/non-sworn wage and benefit reports. She announced she is a “no on this budget as it stands,” citing inadequate response to Trump administration attacks, recession risk, and over-investment in policing versus root causes.
• Councilwoman Pastor worried about reductions to landscaping maintenance (12 to 7 annual mows), arts collection maintenance, park maintenance, and public works non-critical minor maintenance ($500,000). City Manager clarified that reductions are minor, maintenance is prioritized through a new major maintenance program, and arts reductions come after prior increases. She asked for clarity that the vacant parcel maintenance reduction (7 times per year) is for city-owned vacant lots, not all properties.
• Councilman Waring asked if any new programs were added (no new programs; increases are to existing departments). He noted personnel costs are 75% of budget. He expressed frustration over police staffing decline from 3,125 hiring target to 2,485 filled, arguing the “defund police movement won” and that fewer officers reduce visibility for traffic enforcement and potential heat-related distress responses. He questioned the fire station allocation for District 2 (no new station in 2023 GO bond) and criticized Governor Hobbs for not vetoing the rental tax elimination.
• Councilwoman Guardado confirmed no cuts to heat resilience programs (cool pavement, tree planting) and requested a report on tree survival rates. She noted a 14-year life expectancy difference between Maryvale and North Phoenix, urging more creative action for Maryvale. Mayor Gallego also noted the new 24-hour cooling space at 20 West Jackson. -N City Manager Response: Fire budget has increased 89% total (91% General Fund) from 2016-17; proposed additions of 134 sworn plus 119 from bond stations will bring sworn filled count from 1,865 to 2,118 (503 increase, 13% over 10 years). 40% of the TPT increase goes to fire. He defended the council’s record on fire funding.
• Additional Clarification on Bus Stop Shade: Transportation department reported 4,100 stops, 76-77% covered, minimum 80 new covered stops per year under T2050, with equity distribution within 1-3 percentage points among districts. Councilwoman Pastor requested a map for Maryvale.

Key Outcomes

• No votes taken; the meeting was for policy discussion and public input.
• Next Steps: Formal budget vote on May 21, 2025; tentative adoption June 4; final adoption June 18; property tax levy adoption July 2.
• Directives: Staff to provide: list of federally-funded programs at risk of cuts (requested by Councilwoman Hernandez); sworn and non-sworn wage/benefit projection report; tree survival data from upcoming inventory (requested by Councilwoman Guardado); report on cool pavement, shade, and tree planting in Maryvale; and a bus stop shade coverage map for Maryvale (requested by Councilwoman Pastor).
• Budget Status: A projected $17 million one-time surplus after all strategies, to be set aside as reserve due to economic uncertainty. The City Manager committed to no layoffs and no filled position eliminations.