Tempe anticipates losing $20 million in its annual revenue with the approval of a state bill repealing a home and apartment rental tax that is expected to cost over $180 million in statewide losses.
Gov. Katie Hobbs signed the bill on Tuesday, with it taking effect in the latter half of fiscal year 2024-25.
Reports posit that the bill will take away anywhere from $180 million to $230 million a year in revenue that a majority of the state’s 91 cities and towns collect, according to the League of Arizona Cities and Towns.
Locally, Tempe expects impacts in January 2025, with a greater loss in revenue than the League’s initial estimate of $16,074,606.
City Communication and Marketing Office Director Nikki Ripley wrote in a statement that Tempe estimates a total impact of $20.8 million, with $13.8 million of that taken from the city’s general fund. She said that this loss represents 9% of estimated sales tax revenues.
“There are a number of options for measures that the city could implement to address revenue shortfalls – one such example is reducing cash payments for capital projects,” Ripley stated.
She explained that Tempe officials will coordinate with the League on next steps, and city council plans to discuss this in a public session in the coming months.
Reporter Caroline Yu can be reached at cyu@iniusa.org
To voice your opinion on this story, connect with us at AzOpinions@iniusa.org.
Meet Caroline Caroline Yu joined Independent Newsmedia, Inc., USA, in 2020 as a summer intern covering Scottsdale. As an intern, she continued her coverage of Scottsdale, Paradise Valley and Tempe. After graduating in 2022, Caroline became a full-time reporter for Scottsdale and Paradise Valley. She is currently reporting for the Tempe market.
Community: She is a supporter of the environment and tries to get involved with related community events.
Education: Arizona State University with a BA in Journalism and Mass Communications, with a minor in French.
Random Fact: She used to be a ballet dancer for 10 years.
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