Phoenix proposes $163M projected surplus; $2.5M master-lease pilot and $5M child-care set-aside in 2026-27 trial budget

The City of Phoenix unveiled its proposed 2026-27 City Manager's trial budget at a bilingual hybrid hearing April 11, projecting a $163 million General Fund surplus and proposing targeted investments in housing, child care, public safety and employee compensation.

Deputy City Manager Amber Williamson said the trial budget shows $61 million in ongoing revenue and $102 million in one-time resources that together produce a $163 million projected surplus. "The feedback we received today is very important," Williamson said, and staff will present the proposed budget to the City Council on May 5 with a council vote scheduled for May 20.

Why it matters: city officials said the surplus and one-time resources let Phoenix maintain core services while testing programs to address homelessness, affordability and service capacity. The proposal sets aside $75 million to help balance the 2027-28 fiscal year and retains a $53 million employee compensation pool to support hiring and retention.

Key details and proposals

- Budget totals: The trial budget presentation lists a projected General Fund surplus of $163 million, including $61 million in ongoing revenue and $102 million in one-time resources. After reserves and accounting for future obligations, staff reported a $70 million available surplus and a $75 million set-aside for 2027-28 stability.

- Housing and shelter: The proposal includes $12.9 million for emergency shelters, $1.5 million for a 24/7 heat-relief site and extended cooling centers, $1.5 million for the Keys to Change shelter facility, $2.5 million proposed to create a master-leasing pilot (more than 50 units) intended to activate private units for people exiting homelessness, and $6.6 million for the Housing Trust Fund to support fee waivers and pre-approved housing plans.

- Child care and family supports: The trial budget includes a $5 million set-aside aimed at improving child-care affordability and expanding teen programming across community centers.

- Public safety and infrastructure: The budget proposes park lighting improvements and streetlight upgrades (17 new lights and 24 upgrades cited along the 27th Avenue corridor), investments in planned facilities such as Lone Mountain Park and the Esteban Park Recreation Center, and aviation and water-staffing enhancements at Phoenix Sky Harbor International Airport.

Public comment and staff clarification

Resident Elise Hammonds, who identified herself as living in District 7 and participating in a budget work group, asked the council to add client supports for working families who do not meet emergency-eligibility thresholds but still struggle with costs. "I think there should be some place in the budget during these times for those families," Hammonds said.

Budget Director Aaron Mertz responded to a participant's concern that some line items in the tabloid read as "zero dollars," explaining that those figures often reflect positions that were previously temporary and whose funding has already been captured elsewhere in departmental budgets as ongoing positions, not an omission of funding.

Council response and next steps

Councilmembers and the mayor thanked staff for the budget work and for attending the Saturday hearing. Councilwoman Hodge-Washington (Vice Mayor) described master leasing as "a practical, immediate tool" to lease units from landlords and sublease them to residents who otherwise cannot access the market, saying the pilot is intended to provide housing more quickly than building new units.

Deputy City Manager Williamson and staff invited continued public input; the City Council will review the proposed budget on May 5 and is scheduled to vote on the budget on May 20, with final adoption and property tax ordinance actions to follow in June and early July.

What the record does not show

There were no formal motions or votes recorded during this hearing. One virtual speaker (Alicia Dunn) was listed but did not appear online for public comment. The hearing record does not identify any final policy adoptions or ordinance actions at this meeting.

The hearing record and materials are available at phoenix.gov/budget.