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.
The city is also warning about risks ahead. Thomure’s memo says potential state tax-code conformity with recent federal changes could reduce Tucson revenues by more than $7 million in FY28. It also flags a legislative proposal that would freeze nearly all new local taxes, fees, and utility-rate increases for four years, which city officials argue would limit their ability to respond to rising service costs.
On taxes and fees, the proposed primary property tax rate would fall to $0.4245 per $100 of assessed valuation, below FY26’s rate. At the same time, the city is proposing fee changes that would take effect July 1, including adjustments tied to development, parks, and the new Clean City Fee, which the memo says would reduce General Fund expenses by about $830,000.
Transit remains one of the city’s biggest operating commitments. The proposed FY27 budget includes $141.7 million for the Mass Transit Fund, supported by a $60.8 million General Fund transfer, and $7.1 million for Sun Link, including a $3 million General Fund transfer.
Overall, the recommendation reads less like an expansion budget than a reset budget — one aimed at keeping core services intact, continuing infrastructure spending, and preserving flexibility as Tucson navigates weaker revenue growth and continued uncertainty from the state and national economy.
To read the full 36-page City Manager’s Memo go here: MEMORANDUM FROM CITY MANAGER TIMOTHY M. THOMURE, P.E. DATED APRIL 21, 2026
City staff will present the City Manager’s recommended budget at three in-person Information Sessions and two virtual Information Sessions before the public hearing at the Mayor and Council Regular Session meeting on Tuesday, May 5.
When
- Wednesday, April 22, 2026 | 06:00 PM - 07:00 PM (In person and Virtual)
- Thursday, April 23, 2026 | 06:00 PM - 07:00 PM
- Tuesday, April 28, 2026 | 06:00 PM - 07:00 PM
- Thursday, April 30, 2026 | 06:00 PM - 07:00 PM
- Friday, May 01, 2026 | 09:00 AM - 10:00 AM (In person and Virtual)
Location
Thursday, April 23, 6-7 p.m.
Morris K. Udall Recreation Center
7200 E Tanque Verde Road
Tuesday, April 28, 6-7 p.m.
El Pueblo Recreation Center
101 W. Irvington Road
Thursday, April 30, 6-7 p.m.
Donna R. Liggins Recreation Center
2160 N. 6th Ave.
Go here for In-person and Virtual Information Sessions: FY2027 Recommended Budget City of Tucson for virtual sessions April 22 and May 1.