CHANDLER, Ariz. – The Chandler City Council held the first of three upcoming work sessions to create the fiscal year 2025-2026 operating budget and capital improvement program. The budget equips Chandler to provide high quality services and infrastructure with the lowest sales tax rate in Arizona and maintain utility service costs among the lowest in the Valley.
The work session began by discussing the results of the annual budget survey, where residents expressed high levels of satisfaction with their quality of life, safety and services received. The survey also identified residents’ spending priorities, encompassing desired improvements in parks and recreation, public safety, social services and streets.
Chandler continues to be recognized for sound budgeting practices that support the city’s financial stability. This includes maintaining strong financial reserves and a structurally balanced budget where ongoing revenues cover ongoing expenditures and one-time revenues are used for one-time expenditures. Chandler’s AAA bond ratings from all rating agencies also produces savings for taxpayers to finance major capital improvements.
The City Council then shifted its discussion to the financial and economic considerations that could influence next year’s operating budget and capital projects. These factors include national and local economic indicators and inflationary impacts to forecasted revenues and costs.
Local economic growth is projected to remain steady as employers expand and building permits valued at $150 million are issued. Chandler’s population has increased nearly 13 percent since 2017, which expands the available residential tax base.
Councilmembers also raised a freeze of federal funds as another factor to consider. Federal funds are used to support the city’s public housing program and related services. This topic will be revisited in March during the Council’s next budget work session.
Other factors influencing the city’s sources of revenue is fluctuations of local sales tax revenues and state legislation that eliminated the residential rental tax as of January 2025. Chandler also is monitoring a state food tax legislative proposal that could result in an additional $17 million loss in ongoing revenue.
The City Council closed the session by offering preliminary guidance about operating and capital priorities, as well as property tax rates that finance major city improvements. An update was provided regarding the financial status of the Public Safety Personnel Retirement System. Chandler is the largest Arizona city to pay off the pension’s unfunded liability.
Link to Budget Work Session Presentation