Marana and Oro Valley have adopted their final budgets for fiscal year 2026-27, with the two neighboring municipalities taking markedly different approaches.

Marana's $560.2 million budget is up $144 million from last year, driven largely by capital projects, while Oro Valley's $128 million budget is down $23.5 million.

Marana passed its budget, which focused on capital outlay, at its June 16 town council meeting. Oro Valley passed its budget at a town council meeting the next day, while also authorizing the collection of a 2.5% use tax on local businesses.

Capital outlay, which covers purchasing, maintaining and upgrading land and infrastructure, accounts for $400.2 million, or 72% of Marana's total budget, according to Finance Director Yiannis Kalaitzidis, who said the budget was not altered from the preliminary version council members approved in May.

Councilmember Herb Kai did not attend the meeting, but the remaining six council members unanimously approved the budget. The council then held a short public hearing during which Kalaitzidis summarized the final budget.

"A lot of road infrastructure and a lot of utility projects are included in this budget," Kalaitzidis said.

The town's projected revenues for the 2026-27 fiscal year total $491 million.

"We continue to put together a budget that reflects the careful allocation of resources and invest in our community and in key areas," Kalaitzidis said.

Oro Valley's budget includes a 10-year capital improvement plan and a 1.5% raise to the minimum and maximum pay for town employees.

Chief Financial Officer David Gephart told council members the budget reflects a $420,000 net decrease in projected revenues for the General Fund and Highway Fund but made no changes to the expenditure limit or allocation of funds.

"Over the course of my time on council … I've come to appreciate the professionalism of our staff, of the seriousness with which they approach the stewardship of taxpayer dollars," said Mayor Joe Winfield. "This budget, in my view, is another example of that commitment."

The budget was unanimously approved by the council, which also discussed the addition of a 2.5% use tax to the Oro Valley tax code. The tax had previously been approved Jan. 14 but was invalidated after the Arizona Department of Revenue missed a procedural deadline.

Under the new law, local businesses would be taxed 2.5% on any purchases made outside of Oro Valley. Gephart said the tax was intended to level the playing field between local and out-of-state businesses. He also cited annual gas tax revenues outstripping the annual cost of road maintenance as another reason for the change.

"The difference between the expenditure growth and revenue growth is about $1.7 million to the negative," Gephart said.

The council's response was mixed. Vice Mayor Melanie Barrett, who had previously voted against the tax in January, said she wanted to wait until an operational efficiency audit had been completed before approving a new tax.

Winfield and three other council members voted in favor.

"This is a standard provision used by nearly every municipality in our region," he said. "It promotes fairness, supports local businesses, and provides modest additional revenue to help maintain the (city's) services."

The use tax passed 4-3.

Benjamin DePue is a University of Arizona student and Tucson Spotlight intern. Contact him at bdepue@arizona.edu.

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