Phoenix is putting millions more into homeless services, thanks to federal funding through the American Rescue Plan Act, known as ARPA.
Phoenix received nearly $400 million for COVID-19-related costs and economic recovery. On Wednesday, the City Council approved using another $15 million in ARPA funds to continue various shelters and services through June 2025. City Manager Jeff Barton warned Phoenix’s overall expenses are going up while revenue is going down.
“Unlike the federal government we can’t run a deficit. We have to have a balanced budget every year so we will have to make tough decisions,” he said.
ARPA funds have specific spending requirements and must be allocated before the end of 2024. Despite the extra federal dollars, Phoenix could face a budget shortfall this year. The state changed the way it distributes income tax to cities and Phoenix will get $36 million less in the fiscal year that begins July 1. And, in 2025, cities will no longer be allowed to collect tax on residential rents, a ban that Phoenix estimates will cost more than $40 million annually.
Councilman Jim Waring said some residents are fed up with so much emphasis on homelessness.
“We can’t let 7,000 people dictate the budget, the multibillion-dollar budget, for 1.6 million, so if something’s gotta give and something’s gotta change; 7,000 should start having to adjust more to us and our desires than the other way around. It’s gotten way out of hand,” he said.
Other council members said a focused regional approach and more state support for homeless services and prevention is needed, opinions they’ve stressed for several years.
In the past three years, Phoenix has earmarked $140 million for homeless outreach, services and shelters.
