The Gilbert Town Council voted unanimously Tuesday to adopt a preliminary $2.5 billion budget for fiscal year 2025-26, setting the maximum allowable expenditure level as required under Arizona law.
The decision came after a detailed presentation from town staff outlining both fiscal challenges and major capital investments planned for the coming year.
“Fiscal ‘26 is going to be a difficult budget year for the town, and the available revenues moving forward are also likely to continue to be tight,” said Town Manager Patrick Banger, citing a permanent $14 million reduction in annual revenue due to the elimination of the residential rental sales tax and changes in state shared income tax.
Town staff emphasized the newly adopted sales tax increase, which took effect Jan. 1, is earmarked for specific “quality of life projects.” However, ongoing economic pressures remain significant.
“We still are seeing inflation and supply chain issues that are not yet fully resolved,” Banger said, along with the challenges of wage inflation, workforce shortages, and aging infrastructure.
Despite those constraints, the town has continued to receive national recognition. Budget Director Kelly Pfost highlighted Gilbert’s designation as the third safest and most affordable city among the top 100 places to live and the No. 1 city for economic growth.
The budget includes a total of 34 new full-time employees and approximately 17 to 18 limited term agreement positions. The LTAs, which are typically for one year, are funded with one-time money rather than ongoing revenue due to budget constraints.
“The ongoing money was very tight this year,” Pfost said.
A major portion of the budget — approximately $1.7 billion — is allocated to capital improvement projects, primarily focused on streets and water infrastructure.
Of that amount, about $1.2 billion accounts for projects underway and continuing into next year, while approximately $490 million covers new or expanded projects.
Pfost noted the full capital amount is budgeted up front to ensure funds are available when contracts are awarded, although actual expenditures will be lower in the fiscal year because of the multiyear nature of many projects.
The secondary property tax rate will remain at 98 cents per $100 of assessed value, consistent with the rate maintained since fiscal year 2023-24. This will fund a property tax levy of $34.8 million.
Council members discussed the cost implications of lowering the rate and the broader impact on Gilbert residents.
“What most people don’t understand is that the town of Gilbert’s portion of property taxes (is) about 10% of the property tax you’re paying,” Council Member Jim Torgeson said.
Council members also debated elements within the budget, including a proposed electric vehicle purchase.
Pfost confirmed such items could still be removed before final budget adoption.
“With direction from the council that could be directed to not purchase that vehicle,” she said. “Whatever the direction from council is, we can accommodate that.”
The preliminary budget sets the upper limit of spending but is not final. The final budget, which may be equal to or less than the preliminary amount, is scheduled for adoption on June 10.
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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