The town of Gilbert is bracing for a difficult budget year as officials prepare the fiscal year 2025–26 spending plan.
Town Manager Patrick Banger and Budget Director Kelly Pfost outlined the financial landscape at Gilbert Town Council’s April 22 study session, ahead of the May 20 preliminary budget adoption, citing steep revenue shortfalls, inflation and growing community needs.
The proposed total budget for FY 2025-26 is $2.46 billion, up slightly from the previous year’s $2.3 billion. A final adoption vote is scheduled for June.
The property tax rate is anticipated to remain flat at $0.98 per $100 assessed valuation.
The town is facing a $14 million drop in ongoing general fund revenues due to the elimination of the residential rental sales tax and a reduction in state-shared income tax from the implementation of a flat tax.
Banger said the town will be losing approximately $9 million annually from the rental tax and another $5 million from state tax reforms.
Despite sales and bed tax rate increases plus a new user tax implemented to support key infrastructure projects, Banger noted that inflation, supply chain disruptions and rising labor costs continue to strain operations.
“We continue to deal with wage inflation and market competition for FTEs, or employees as we commonly refer to, and an increased workload on staff and inability to fund all of the positions that we see necessary to maintain our service lines,” he said.
Gilbert’s population continues to grow, currently at 293,000 and projected to reach about 330,000. This growth, combined with aging infrastructure and uncertain economic forecasts — including potential recession risks — means fiscal constraints will remain a concern.
“In summary, fiscal 26 is a difficult budget year with available revenues moving forward,” Banger said. “We believe they're going to continue to be exceedingly tight.”
Comparing Gilbert to neighboring cities, Banger pointed to key disparities in per capita funding.
In FY 2024, Gilbert collected about $540 per resident in sales tax, significantly lower than cities like Scottsdale at $1,379.
In general fund dollars per capita, Gilbert again lagged behind, with about $1,000 per resident compared to Glendale’s $1,784.
“This is how much money Gilbert raises to spend on our community to maintain service lines,” Banger said.
Budget Director Kelly Pfost provided further insight into the town’s budget strategy. The FY 2025-26 budget requests from town departments totaled $80 million across all funds, but only $44 million is recommended for funding, with the general fund accounting for $26 million.
“Pretty much the rest of the pie and everything in the other funds is just keep the wheels on the bus,” she said. “It costs more to do what we have been doing, and so we've had to add funding to those different areas just to keep the services going that we have traditionally provided.”
Most of the general fund’s $26 million allocation supports maintaining current services, including $7 million for full-time equivalent positions and $4 million in overtime for police.
New services are minimal, with only about $2 million in new service level spending, mostly tied to staffing the town’s planned new advocacy center.
Most of the budget comes from the town’s $1.7 billion investment in capital improvement projects, especially in streets, water and parks. Much of this figure includes carry-forward funds for multiyear projects and $500 million in new funding.
“We will not spend this money completely out next year, but we do need it to issue those contracts and to continue working on those projects that take several years,” Pfost said.
We would like to invite our readers to submit their civil comments, pro or con, on this issue. Email AZOpinions@iniusa.org. Tom Blodgett can be reached by email at tblodgett@iniusa.org or follow him @sp_blodgett on X.
Meet Tom Tom Blodgett joined Independent Newsmedia, Inc., USA, in 2022, when the company acquired Community Impact Newspaper's Phoenix-area properties. Raised in Arizona, he has spent more than 35 years in journalism in the state.
Community: He has served as an instructional professional in the Walter Cronkite School of Journalism and Mass Communication since 2005, and is editorial adviser to The State Press, the university's independent student media outlet. He also is director of operations for an 18U girls fastpitch softball team from Gilbert.
Education: Arizona State University with a BS in Journalism.
Random Fact: He lived in Belgium during his freshman year of high school.
Hobbies: Tweeting enthusiastically about ASU softball (season-ticket holder) and grumpily about other local sports (pessimistic fan).
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