Peoria City Council Approves $1.192 Billion Budget for FY 2026, Prioritizes Safety, Infrastructure, Without Tax Hike

The Peoria City Council has given the green light to an ambitious $1.192 billion budget for Fiscal Year 2026, with funds earmarked for bolstering community safety, water infrastructure, economic development, and recreational facilities. This figure marks a significant increase from the previous fiscal year's $995 million budget, primarily driven by capital projects, as reported in an announcement made on Wednesday. Notably, there will be no tax increases associated with the new budget.

Peoria Mayor Jason Beck emphasized that the budget is designed to support the city's growth trajectory, with a particular focus on the Peoria Innovation Core. This region is set for accelerated road and water infrastructure development to draw in new economic ventures, promising job creation and additional sources of revenue that are, according to Beck, "essential to the future prosperity of the city." The city projects that many of these infrastructure investments will be reimbursed as state land auctions take place and development unfolds.

The operations component of the FY2026 budget sits at $478.4 million, up 4.3 percent from last year. This increase accommodates 38 new full-time positions in the Police, Fire, Public Works, Water, and Engineering departments, as well as adjustments to employee compensation and health insurance premiums. The substantial rise in the capital budget, set at $572 million, represents a 32 percent jump from the previous year. This includes the first year of a 10-year Capital Improvement Program, with a projected total of $1.9 billion. A major contributor to this effort is the new Peoria Innovation Core, which consolidates all relevant infrastructure projects into a substantial multi-decade plan in partnership with the Arizona State Land Department.

Debt obligations for FY2026 are estimated at $53 million, associated with general obligation and revenue bonds. Stepping away from the burden of additional taxation, the budget maintains the overall property tax rate and holds the city's retail sales tax rate steady at 1.8 percent. However, residents will see a combined utility rate adjustment of 5.5 percent to account for factors like inflation, the Colorado River drought, fuel and vehicle costs, and recycling revenue fluctuations. Even with these adjustments, set to commence on July 4, 2025, Peoria officials assert that their residents will still enjoy lower utility rates compared to other Valley cities.

A contingency appropriation is included in the FY2026 budget, in line with state law, authorizing the use of $88.6 million in financial reserves for emergency or unforeseen situations. This reserve authority is under the sole discretion of the City Council. Modifications to the initial budget proposal after the Council Budget Workshop saw the addition of projects like a $4 million funding for Emergency Communication Equipment, a $3 million design for a Recreation Center at Paloma Community Park, and a $10 million boost for improvements at the Peoria Sports Complex Auxiliary Field. The tentative budget was approved on May 13, and the implementation of the property tax levy is scheduled for discussion on June 17, with the budget taking effect on July 1, 2025.