Phoenix says no tax increases needed this year

Phoenix won’t need to raise taxes to balance its budget, at least for now.

The city’s manager and budget planners told the Phoenix City Council Tuesday that they were able to cut an anticipated shortfall by $56 million through a combination of cost cuts and increased revenue from existing taxes.

That recommendation came after a December warning from Phoenix City Manager Ed Zuercher that the city would have to find a “dedicated source of funds” or “reallocate money for services” to offset rising pension costs.

Early last year, a $43-$64 million budget shortfall had been projected for Phoenix’s budget.

Phoenix Budget Director Jeff Barton told the council Tuesday that increases in the city’s revenue are coming from more vehicle sales tax dollars and a bigger share of state-shared revenue due to the city’s population growth.

About $12 million to $15 million in savings will come from a controversial decision to increase the term of Phoenix’s pension debt.

Phoenix also reduced spending by more than $14 million, but specifics of those cuts weren’t discussed Tuesday.

Phoenix Mayor Greg Stanton summarized Tuesday’s recommendation from the city’s financial team as “no revenue (tax) increases, no service cuts” for the upcoming fiscal year.

A bigger discussion on the city’s budget and pension fund debt are planned for next month.