Mayor Kate Gallego delivered a largely upbeat State of the City address last week.
(City of Phoenix/Submitted)
Phoenix is riding a wave of economic growth driven by semiconductors and biosciences, but faces mounting threats tied to water shortages and federal policy, Mayor Kate Gallego said April 21 in her annual State of the City address.
Gallego framed Phoenix as a city on the rise while warning that decisions beyond Arizona’s borders could shape its future.
“The state of our city is stronger than it has ever been,” Gallego said.
Gallego highlighted major investments in advanced manufacturing and health research, pointing to Phoenix’s growing role in the national economy.
She heralded the city’s significant push in biosciences, including a $50 million city investment in ASU Health, the largest such commitment Phoenix has made in the sector.
“We also asked ASU Health to tap into an area that has been historically under resourced: women’s health,” the mayor said. “Too many medical devices are designed for 30-year-old men. ASU Health will design procedures and technology with the unique needs of women in mind.”
The University of Arizona’s “catalytic investment” in its downtown medical school also was heralded by Gallego.
“Through a partnership with Banner, the UA Medical School has made a $59 billion impact on our community and has trained nearly 2,000 doctors. UA’s work downtown will grow with the new UA Medical Innovations Building — formerly known as CAMI.”
Gallego said a UA scientist “may be on the verge of an exciting breakthrough: modifying stem cells in a way that hides them from the immune system.
“And just steps away, at the National Institutes of Diabetes and Digestive and Kidney Diseases in the Wexford Building, some of the most advanced research on Type 2 diabetes is taking place. It’s where scientists discovered that breastfeeding in the first two months of life is associated with a lower risk of obesity and Type 2 diabetes later in a child’s life.
“What’s happening at the Bioscience Core is changing the world. Caris Life Sciences, one of our great TGen success stories, is also putting Phoenix on the map for medical breakthroughs. Caris already possesses the world’s highest genome sequencing capacity and continues to push the limits of discovery. This allows for more personalized cancer treatment than ever before.”
The mayor also noted that JelloX Biotech in Taiwan “wanted to work specifically with the Mayor Clinic” and is working to put AI-powered 3D pathology into routine clinical uses that could help detect cancers earlier and more precisely.
“Spain-based ROIS is also on the cutting edge of cancer research—and Phoenix is its newest manufacturing site,” she said.
“ROIS makes specialized injectables that can treat rare diseases, obesity and cancer with pinpoint precision, addressing problems at the source rather than shocking the whole system.
Meanwhile, the mayor noted that semiconductor giant TSMC’s $165 billion investment continues to anchor the region’s chip industry, while suppliers and related companies are expanding nearby.
Over the past decade, she said semiconductor jobs have grown 31% and bioscience jobs rose by 39%.
Gallego also announced a new initiative aimed at positioning Phoenix as a leader in quantum technology, calling it the next frontier of economic development.
“Quantum technology is a promising platform for new economic growth, and by harnessing our assets and having the right approach, we can attract investment and better diversify our economy with industries built for the future.” Gallego said.
She said one company, EigenQ, “is building the infrastructure for post-quantum security.
“Each day our city depends on digital systems — from traffic signals to water treatment to emergency response. EigenQ is creating the next generation of digital protection, designed to defend against threats that haven’t yet arrived.”
Even as she emphasized growth, Gallego made clear that water remains the city’s most critical long-term challenge.
“Water security is not a challenge that can be ‘fixed,’” she said. “It requires long-term, thoughtful management.”
Phoenix has diversified its supply, she said, relying heavily on the Salt and Verde rivers while investing in conservation, groundwater storage and water recycling.
The city is also advancing new purification projects that could eventually serve hundreds of thousands of households, part of a broader strategy to maintain supply without increasing overall water use.
But Gallego sharply criticized federal proposals related to the Colorado River, warning they could disproportionately harm Arizona.
“That just won’t work,” she said of plans that would impose deeper cuts on the state while requiring less from upstream users.
The White House is expected to announce a plan within the next few months for the distribution of Colorado River water among the seven Basin States as well as tribes that rely on it.
“The Drought Pipeline Project, which we completed a few years ago, helps protect north Phoenix from shortages and gives us the tools to move water where it’s needed,” the mayor said.
She noted that two advanced water purification facilities, including one in Cave Creek, will soon provide a combined 14,000-acre-feet a year of purified water — enough to serve 40,000 families.
“These facilities are the precursors to a larger, regional facility that will serve communities throughout the Valley. Near the turn of the decade, the Pure Water facility at 91st Avenue will deliver around 60 million gallons each day — enough to serve 200,000 households.”
Gallego also pointed to progress on housing, saying the city has created or preserved more than 65,000 housing units and approved zoning for another 90,000.
The city also recently launched a housing trust fund expected to reach $15 million, aimed at supporting affordable housing development.
At the same time, she acknowledged ongoing challenges, particularly among seniors and those experiencing homelessness.
“Seniors comprise one of the fastest growing populations experiencing homelessness,” she said.
The mayor highlighted continued investment in transportation infrastructure, including the expansion of light rail into South Phoenix, a planned extension into Maryvale and improvements to the I-10 Broadway Curve, where congestion has been cut significantly.
She also pointed to the rollout of electric buses and ongoing regional freeway projects as key to supporting growth.
Gallego emphasized investments in emergency response, including plans to build seven new fire stations and expanded efforts to address firefighter cancer risks.
She also highlighted the city’s evolving approach to 911 calls, which now include behavioral health response teams.
Stating “police officers and firefighters aren’t the best people to respond to every situation, so we created another resource,” the mayor said:
“Today, when you call 911 in Phoenix, our operators will ask, ‘Do you need police, fire or behavioral health?’ Through our Community Assistance Program, we have invested in individuals with social work training who can take the lead when they are most appropriate responders.”
“That’s what it looks like when government works,” she said, describing a recent crisis intervention that prevented a suicide.
Throughout the speech, Gallego struck a tone that balanced optimism with caution — celebrating Phoenix’s momentum while acknowledging external risks.
She pointed to federal policy, water negotiations and economic pressures as factors that could shape the city’s trajectory in the coming years.
Still, she closed with a confident message about Phoenix’s direction, noting she was beginning her eighth year as mayor.
“I used to say that Phoenix’s best days are ahead of us. But after eight years of working alongside you, I can tell you: They’ve arrived. Because of you, because of our work together, the state of our city is stronger than it has ever been.
“The future is Phoenix — and the future is now.”