Phoenix city administration has revised its proposed $2.29 billion General Fund budget for 2026–27, increasing funding for direct resident assistance, youth programs and food access while slightly reducing a major allocation for employee compensation.
In a memo to City Council last week, City Manager Ed Zuercher said the changes reflect both updated financial projections and feedback gathered during a series of community meetings across the city.
“The proposed budget reflects careful financial planning,” Zuercher wrote, pointing to economic uncertainty and affordability concerns as key factors shaping the revisions.
He noted that city officials conducted 12 community hearing on the Trial Budget and that based on feedback, an additional $2.4 million was allocated to “several new or enhanced programs.”
The revised proposal lowers the city’s projected fund surplus slightly, from $163.3 million in the initial March proposal to $162.5 million, due largely to updated spending estimates and finalized labor agreements.
That money is being redistributed across several priority areas, including community health and safety ($1.6 million); children, youth, and families ($9.4 million), homeless service continuity ($18.4 million); housing affordability ($6.6 million); “planning and development customer service enhancements ($1.5 million) and employee compensation ($50.0 million).
In addition he is proposing to set aside $75 million in reserve for the 2027-28 budget, when a substantial deficit is projected.
Zuercher emphasized that the revised plan remains balanced while attempting to address both immediate needs and long-term stability.
The revision also proposes 57.9 new positions at a cost of $162.5 million.
At the same time, Zuercher’s memo notes adjust the employee compensation set-aside from $53.2 million to $50.0 million for raises “due to slightly more of the final compensation package occurring in the second year of the contract.”
And it proposes reductions in both the primary and secondary property tax rates – from 1.2658 to 1.2652 for the primary and from .88141 to .07745 for the secondary levy.
Among the most notable revisions is a major increase in flexible emergency financial assistance, which more than doubled from the original proposal.
Funding rose from $1.5 million to $3.15 million, aimed at helping residents facing financial crises tied to cuts in federal assistance programs.
“This funding is intended to help prevent homelessness and stabilize housing and food security for low-income individuals and families in light of recent reductions and restrictions in federal funding, which have impacted SNAP recipients, refugees, and other community members,” Zuercher’s memo states.
Stating the increase “will allow more residents experiencing financial distress to receive assistance,” it adds:
“The assistance will include both targeted one-time crisis assistance and stability assistance, which includes case management support. Up to $200K of the funding may be used on staffing to support this expanded program.”
The budget also significantly boosts funding for youth programming.
Spending on teen services nearly doubled — from $500,000 to $937,000 — to expand tutoring, recreation and affordability at community centers citywide.
Officials said the increase responds directly to resident calls for more youth investment and education-related services.
One of the more nuanced changes involves a shift within a previously approved childcare initiative.
The revised budget redirects a portion of a $5 million childcare affordability set-aside for one year only to helping residents navigate eligibility and application issues tied to recent state and federal changes in food stamp benefits, which now include a work requirement for many recipients.
City officials said the move addresses immediate gaps in food assistance while longer-term childcare strategies are developed.
One of the largest components of the budget remains unchanged but continues to carry major policy implications.
The city is allocating $18.4 million to maintain homelessness services previously funded through federal pandemic relief programs that are now expiring.
That funding supports: shelter operations serving roughly 1,600 people nightly, heat relief programs, housing transition efforts, and operations at the Key Campus service hub.
It also includes $2.5 million for a master lease program that would enable the city “to secure master leases for rental housing units, which include on-site support services, to sublease to individuals exiting homelessness to free up shelter bed space.”
Zuercher also is proposing a one-time $6.6 million increase to the Housing Trust Fund, bringing the total allocation to $15 million. This includes $2 million “for waivers or reductions on affordable housing and related project plan review, permit, and inspection fees, consistent with the Housing Trust Fund guidance adopted by the City Council in November 2025. “
It also includes $1 million for th creation of “pre-approved housing plans focused on affordability and the character of the city’s villages.”
The budget also proposes $500,000 to improve security lighting at Buffalo Ridge, Moon Valley, Sueno, and Western Star parks, and perimeter lighting improvements at Hilaria Rodriguez Park.
The budget assumes 3.5% revenue growth and cites risks including geopolitical instability, shifting federal policy and affordability pressures.
“The need for careful financial planning” remains a central concern, the city manager’s report states.
The revised proposal makes no changes to non-general fund spending, including enterprise funds such as aviation.
That signals that most policy shifts are being concentrated within t core city services and resident-facing programs are funded.
City officials said the revisions were shaped in part by 391 public comments gathered through the 12 community meetings and additional outreach.
Residents called for more investment in: youth and education, food access, shade and heat mitigation and transit and social services.
The increases in emergency assistance and youth programming reflect those priorities.
The City Council is scheduled to take final action on the budget May 19.