TUCSON, AZ (April 20, 2026) — Tucson City Manager Timothy Thomure has recommended a $2.466 billion budget for fiscal year 2027, framing it as a plan to stabilize city finances after a difficult revenue year while continuing capital spending, employee pay investments, and key voter-backed programs. The recommendation includes a $716 million capital improvement plan and $131 million in debt service, with the capital budget rising 11% from last year.
The memo makes clear the city is still recovering from a significant FY26 revenue shortfall. General Fund revenues for the current year are now projected at $733.1 million, down $43.1 million from the original adopted budget. Even so, after spending controls and revised assumptions, the city now expects FY26 to end with an operating deficit of less than $1.7 million and an available fund balance of about $80.4 million.
A major priority in the FY27 recommendation is employee compensation. The budget includes $18.1 million for additional employee pay investments, including $12.8 million from the General Fund and $5.3 million from non-General Fund sources. Thomure said the funding is part of a multi-year plan focused on market-based pay, progression, performance reviews, and pay equity across the organization.
The proposed spending plan also reflects several policy and political issues that will shape Tucson’s finances over the next year. The budget assumes relief from the recently approved RTA Next plan, which the city says will reduce pressure on the General Fund by cutting mass-transit transfers by more than $5 million in FY27. The memo also points to two November 2026 ballot measures: a proposed new 25-year franchise agreement with Tucson Electric Power, which would preserve roughly $14 million to $15 million a year in franchise-fee revenue, and a proposed extension of the existing 0.1% Reid Park Zoo sales tax…