Arizona cities are preparing to either tighten their belts or raise sales taxes as they adjust for revenue reductions from the state Legislature that will start next year.
Last year, the Legislature passed a ban on cities and towns collecting rental taxes on residential properties that goes into effect in January 2025. That, combined with cities receiving less state-shared revenue after the Legislature’s change to a flat income tax rate instead of a graduated rate went into effect last year, is leading to much less in city coffers.
City of Phoenix officials estimate the city will have $120 million less revenue each year going forward.
