City Manager, Timothy M. Thomure, P.E.
This document presents the City of Tucson’s Fiscal Year 2026 (FY26) Adopted Budget. Totaling more than $2.4 billion, this budget determines how City services will be provided to the Tucson community during the coming year. Under the leadership of the Mayor and Council, we continuously strive to implement a sustainable and balanced financial plan. The FY26 Adopted Budget embodies that fiscal responsibility.
Development of the FY26 budget presented several challenges and opportunities. The primary uncertainty leading up to final budget adoption was whether the city would receive new sales tax revenues under Proposition 414: Safe & Vibrant City, which went to the voters for consideration in March 2025. This proposed 10-year, half-cent sales tax would have provided approximately $80M per year in new funding for community safety, public safety, housing, and related investments accomplished through the city’s General Fund. Voters overwhelmingly rejected this new tax, which heavily shaped the final FY26 budget.
As a result of Prop 414’s rejection, I recommended a series of actions to bring forward the FY26 budget as structurally balanced, yet with increased investments in a few key areas. To achieve the balance, we targeted a total General Fund budget that was essentially flat to FY25, with approximately $18M of proposed budget cuts to directly offset these increased investments. The new investment areas included some of the elements of Prop 414, including 14 additional firefighters, increased funding for community safety efforts such as Violence Prevention and Intervention and Thrive Zone Investments, increased investments in our core city infrastructure through improved asset management actions, accommodating new Information Technology investments, and establishing a General Capital Fund to begin accruing financial resources for the city’s capital needs of the future.
Notably, my proposed FY26 budget included significant additional investment in employee compensation including annual pay progression for most employees, the initial round of “in-range pay placement” adjustments for incumbent employees that were not placed within their applicable salary range commensurate with their prior city experience (direct and indirect), and a series of market adjustments that are scheduled to be implemented in October 2025. This compensation plan also forecasts the anticipated employee compensation plan for FY27 and FY28, to include continued annual pay progression, a second phase of in-range pay placement, known additional market adjustments for commissioned, non-command police and fire personnel, and additional capacity for other market adjustments to be determined. In short, the FY26 budget included significant new money for employee investment – and laid out a three-year plan to correct pay issues and improve our market competitiveness. [Note: We are proposing some additional market salary adjustments for Mayor & Council consideration before they go into effect in October, to further advance our efforts to address employee needs.]
Actions to offset these increases centered on efficiency measures, adjusting the city’s financial reserve policies, eliminating some under-performing programs, reductions in the use of outside professional services, and the elimination of long-term vacancies (36 positions eliminated) to more than offset the personnel additions (25 added). The City Manager’s Office led by example by reducing our allocated head count by eight positions, or 11% of the FY25 budgeted amount.
Ultimately, the Mayor and Council adopted the City Manager’s proposed budget for FY26, with minor modifications. The most significant adjustment was an action by Mayor and Council to identify resources to partially fund Pima County’s “PEEPS” program for early childhood education for one final year, while the County took the necessary actions to identify and implement a long-term, stable funding source for this valuable program.
I look forward to us working together to achieve the positive outcomes for Tucson that the FY26 Adopted Budget provides. We have much work ahead, and we do have significant resources available to improve quality of life for all Tucsonans. Let’s use those resources wisely and support one another as we keep serving our community.