Recommendations for the FY 2026 Budget Survey
Funding for public transit is on the City of Tucson Mayor & Council Study Session agenda on Tuesday, Apr 8, 2025. In the Mayor & Council Memorandum, staff provided three options that the Mayor & Council can act on now to increase funding for transit operations:
Partnership Agreements: Despite the crucial role that public transit plays in the daily lives of students, the City of Tucson's educational partners in the community have yet to chip in any funding. More recently, the leaders of Tucson Unified School District (TUSD), the University of Arizona (UA), and Pima Community College (PCC) have indicated that they are willing to come back to the table for further discussion.
Hotel/Motel Surcharge: Transit plays a key role in supporting tourism in the Tucson area. The hotel/motel surcharge could provide up to $2M for every $1/night increase.
Public Utility Tax (PUT): The Mayor and Council have the authority to increase the PUT and direct the increased revenue to fund transit operations. It is estimated that for every 0.5% increase the PUT will generate approximately $1.7M in additional funding that could be used to fund transit.
In addition to these potential funding sources, staff provided additional options that could be explored if certain caveats were addressed:
Transportation Utility Fee (TUF): Would require a change to the Arizona Revised Statutes (ARS).
Special Taxing District: Would require a change to the ARS to include transit as an authorized use.
Impact Fees: Would require a change to the ARS to include transit as an authorized use.
Rental Car Tax: Would require a change to the ARS. There could be an opportunity for the City, Pima County, and tourism-focused orgs to provide revenues to be reallocated for transit.
Formation of a Metropolitan Public Transit Authority (MPTA): Would require amendments to the ARS to clearly define what type of entity an MPTA is; the scope of the authority to engage in transit operations; and the process for authorization of funding (property taxes, bonds).
Further details about each option are available in the memo.
Zero fares are guaranteed only through June 2025, so our advocacy is still needed! This latest April 2025 memo provides the recommendation that the Mayor & Council direct staff to
