The Rio Nuevo board unanimously approved its budget for fiscal year 2026 at its June 24 meeting, but not without raising concerns about how much the tax district is spending and how to make its investments more effective.

Rio Nuevo is a special taxing district that aims to boost economic development from downtown Tucson to Park Place Mall. Over the past 12 years, the board has helped double the tax base in the downtown area by funding large-scale projects and revitalization efforts.

In the two weeks between its June 10 and June 24 meetings, the board committed $18.7 million to new projects, leaving $13.9 million in available funds for the coming year.

The new budget estimates Rio Nuevo will bring in about $17 million in total revenue next fiscal year, including $1.6 million per month in state sales tax, $150,000 per month in tax rebates, and additional income from leases and property rentals. That includes $75,000 from Greyhound Lines Inc. and $780,000 from the National Bank of Oklahoma.

That revenue will help cover an estimated $1.5 million in office and administrative expenses and $9.6 million in debt payments. After that, about $5.8 million remains for additional project spending. The board is also setting aside $100,000 per month, or $1.2 million for the year, in reserves to cover emergencies or unexpected costs.

“We’re deficit spending,” said board President Fletcher McCusker, acknowledging the financial pressure, which prompted discussion about how to be more strategic with funding.

Vice Chair Edmund Marquez suggested tightening up the board’s commitments by putting less money into individual deals or cutting back on items that don’t generate direct returns. He pointed to the $1 million Rio Nuevo spent on police protection for downtown this year as an example.

“As this board is becoming more diverse it’s not as simple as just passing the budget as we have in the past,” Marquez said. “We’re supporting what needs to be done. But the city is refusing to do their part.”

The board also allocated $615,000 to support downtown events and about $1 million for marketing.

Board member Corky Poster urged his colleagues to think long term and align their investments with the group’s master plan, which includes goals around transportation, safety, housing, and development of grocery stores, hotels and retail space.

“Part of our budget needs to look way forward in the future,” said Poster, a longtime Tucson architect and professor emeritus at the University of Arizona.

Board Treasurer Chris Sheafe warned that unless the group develops more financial discipline, its commitments may soon outpace its resources.

“The reality is we either develop a discipline to live within our budget or we don’t,” Sheafe said.

While members raised concerns about controlling spending, McCusker said the board should leave the budget as is and that being in debt might not be as risky.

“The budget is simply an outline,” McCusker said. “There’ll be plenty of changes during the year that we need and have to adjust to.”

Arilynn Hyatt is a journalism major at the University of Arizona and Tucson Spotlight intern. Contact her at arilynndhyatt@arizona.edu.

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