In an effort to navigate through financial challenges while upholding commitments to public safety, the Surprise City Council has stamped its approval on the Fiscal Year 2025 Final Budget. According to city reports, the budget prioritizes the continuance of quality community services and dedicates resources towards sustainable growth and infrastructure developments. The adoption took place during a Special Meeting on June 4, as detailed by city officials.
The budgetary equation this year was particularly complex due to a significant drop in annual revenue for the General Fund, tallied at $14.3 million. The Fund, serving as the fiscal lifeblood for the police and fire departments, parks and recreation, and general governmental functions, has been hit by a dual fiscal storm. A leg of this revenue loss, amounting to $6.6 million, is due to Senate Bill 1131, which effectively halts all Arizonian cities from gathering residential rental taxes starting January 1, 2025. The additional $7.7 million shortfall springs from a shared income tax deficit attributed to a freshly implemented 2.5% flat income tax rate.
Actions taken by the City Council to counter these setbacks include a stride towards tax reform. A key component of this initiative, approved on the same day as the budget, is the reduction of the primary property tax rate by 25%, scaling it back from $0.7591 to $0.5693 per $100 of assessed limited property value. On the flip side, there's an uptick, where the local transaction privilege tax rate jumps from 2.2% to 2.8% for certain goods and services. These adjustments aim to backfill the gap in the General Fund, enabling the city to maintain vital services in the face of rising operational costs, including staff salaries and inflation, along with capital needs such as road maintenance and updating public facilities.
The newly approved budget is not only about balancing books; it's also about expanding roles. A total of 61 full-time positions are slated for addition over the FY2024 adopted budget. This figure comprises 16 positions that were rolled out in the middle of FY2024 and 45 new slots for FY2025. Public safety roles are a significant fraction of this surge, accompanied by positions designed to support vital utilities—including sectors like water and solid waste management. For the part-timers, a 29.8-position boost is in the pipeline to aid the staffing of a soon-to-launch community aquatic center and park at Cactus and Perryville roads.
Also encapsulated in the FY2025 blueprint is a 5-year capital improvement program, anchored by $100 million from General Obligation (GO) Bond funding for key transportation and public safety projects. These initiatives, endorsed by voters back in November 2023, feature a police substation, land procurement for public safety enhancements, and numerous transportation improvements. The City is also directing its coffers towards asset replacement and preserving pavement, to keep the city’s infrastructure in check. Altogether, the FY2025 fiscal plan chalks up to $952.1 million in expenditures, with an additional $67.1 million tagged for inter-fund transfers, culminating in a grand fiscal layout of $1.02 billion, of which $251.7 million will feed the General Fund.
