Assistant Town Manager Leah Rhineheimer addresses Gilbert Town Council about investing in quality of life in Gilbert by funding priority projects through sales, use and bed taxes.
With a long list of priority projects to finish before build-out in the coming years, Gilbert Town Council took the first step Aug. 20 toward raising its sales tax rate to fund those projects.
Council voted 7-0 to publish a notice of intent to raise rates on the sales tax, but also on a use tax and the town’s bed tax. A public hearing will be held Oct. 22 on the increases, which would take effect Jan. 1.
The biggest impact, both on residents and the town’s general fund, would be the sales tax, which the town would like to increase from 1.5% to 2%, or about 50 cents on $100 of spending. That would put Gilbert’s sales tax rate about in the middle of the pack of Valley cities, Budget Director Kelly Pfost said.
A use tax applies to items that were purchased from out-of-state retailers or through online transactions for vendors who do less than $100,000 in annual sales in Arizona. Gilbert has not been charging a use tax, Pfost said.
The bed tax, applied to people staying at hotels in town, would be raised from 2.8% to 5%, which is the rate most Valley cities charge, Pfost said. It also has been one that has been supported by local hotels, as some of the revenue must be used to promote tourism.
Gilbert staff estimates that the three taxes would raise about $55 million per year, and besides the small amount of revenue from the bed tax that would be restricted to tourism uses, the money would go to help Gilbert cash-fund as much of its priority capital projects as possible.
Council members said they preferred that option to raising the secondary property tax rate through bonding, as it saves money on interest and spreads the impact beyond the residents to others coming into town to spend money.
“Me, I don’t like the tax,” Councilmember Jim Torgeson said. “I don’t think anyone really likes it, but we can eventually get away from property taxing, the secondary property tax, if we’re generating the right money through sales tax, which is a little more voluntary than every six months getting an Eddie Cook (Maricopa County assessor) letter.”
Pfost said some residents had asked if some of the water rate increases could be used instead of a sales tax increase, but she said the town only uses money collected from water rates on delivering water services.
Mayor Brigette Peterson added the town also does not have some taxes other communities do like a transportation tax or a library funding tax.
“We don’t have any of the things we see in a lot of the communities around us,” she said. “Gilbert does a lot more with a lot less, and we have for decades.”
The projects to be funded are in two areas identified as priorities by residents: public safety — police and fire departments — and parks and recreation.
Police projects would include completion of a victims advocacy center, building a crime lab to help increase conviction rates and expanding spaces at the police administration building and SanTan substation for workstations and locker rooms.
Fire projects include expanding some stations for better response time and expanding fleet maintenance space so that workers can work on town fleet vehicles in indoor spaces where they are protected from the heat and elements.
Parks and Recreation, which just completed a master plan with massive public input, would add programming, expand Gilbert Regional and Desert Sky parks and add amenities like trail lighting, multiuse fields, splash pads and pickleball courts.
But the projects come with a large price tag: More than $700 million after council trimmed the list down to its highest priorities.
“Gilbert is generally recognized as an exceptionally vibrant community,” Assistant Town Manager Leah Rhineheimer said. “This does not mean, however, that we are not immune to many of the same challenges that communities across the country are facing, including the need to invest in critical infrastructure and resources.”
We would like to invite our readers to submit their civil comments, pro or con, on this issue. Email AZOpinions@iniusa.org. Tom Blodgett can be reached by email at tblodgett@iniusa.org or follow him @sp_blodgett on X.
Meet Tom Tom Blodgett joined Independent Newsmedia, Inc., USA, in 2022, when the company acquired Community Impact Newspaper's Phoenix-area properties. Raised in Arizona, he has spent more than 35 years in journalism in the state.
Community: He has served as an instructional professional in the Walter Cronkite School of Journalism and Mass Communication since 2005, and is editorial adviser to The State Press, the university's independent student media outlet. He also is director of operations for an 18U girls fastpitch softball team from Gilbert.
Education: Arizona State University with a BS in Journalism.
Random Fact: He lived in Belgium during his freshman year of high school.
Hobbies: Tweeting enthusiastically about ASU softball (season-ticket holder) and grumpily about other local sports (pessimistic fan).
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