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Arizona & Phoenix Local News
Scottsdale Expects to Produce Millions of Dollars More in Income This Year. What Is the Estimated Revenue of Other Cities?
July 24, 2019
Phoenix City Tour Scottsdale

Certain economists are searching for signs of economic instability as the longest cycle of the country’s expansion commences. However, cities of the Valley do not seem to be concerned about it.

SMany cities in the Phoenix Metropolitan Area are hoping to generate 3% to 5% more in sales and other taxes during the current fiscal year in comparison to the last.

Increasing sales tax income indicates a stable economy since it shows that money is being spent on services and goods.

Of the Valley cities, Scottsdale expects the greatest income increase this fiscal year, which started on July 1. The East Valley expects to generate 8.4% more in taxes this year, as stated in the budget documents. This is partly because voters approved of a sales tax boost last autumn.

Other cities, however, had more conservative calculations.

Chandler predicts slightly reduced sales taxes, whereas Peoria expects relative stability of its sales taxes.

Cities are compared amongst each other based on locally obtained taxes. Some examples are franchise taxes, sales taxes, and construction sales taxes, as well as the city’s part of income shared amongst the states. Property taxes are not included.

Taxes constitute the majority of a general fund income of a city, which represents the largest part of operating money as well as funds daily expenses, which range between salaries and park maintenance.

Sales Tax Boost, Constant Growth Results in Income Increase

Scottsdale predicts the revenue of $213.3 million in sales, as well as other taxes, over the current fiscal year. Just to compare, the same city produced $196.8 million last year.

Scottsdale houses$16.5 million more in revenue is the result of a sales tax growth allowed in November by voters. Subsequently, the sales tax of the city increased by 0.1%, which will, in 10 years, lead to raising an approximated $100 million for transportation infrastructure in general.

Buckeye, which is one of the fastest expanding cities in America, is predicting the second-biggest sales tax increase in the area of the Valley. This city expects to produce $58.7 million in taxes over the current year, which is by 8.3% more in comparison to the last year.

The growth is the direct result of the city’s population growth as well as its housing stock, according to the chief financial officer of the city, Bill Kauppi.

As stated by him, the city of Buckeye is issuing over 2,200 building permissions per year for single-family homes. Judging by the current situation, the practice will continue.

He claimed that there were no indicators of a housing crisis and that he himself did not expect one any time soon.

He added that new hotels and retail stores were in the works in the city.

What Is the Expected Income in Tax Money of Your City?

Sales taxes constitute the bulk of a general fund income of a city, which represents the largest part of operating money, as well as funds daily expenses, which range between salaries and park maintenance.

Construction Sales Tax Income Reduced in Other Cities

Peoria and Chandler rank significantly lower in comparison to the previously cited cities when it comes to expected income growth over this fiscal year.

Chandler expects to produce $194.6 million in taxes during the current fiscal year, which is the last year’s amount reduced by around $1 million. Chandler happens to be the sole city in the Phoenix Metropolitan Area predicting reduced sales taxes.

The management service director of the city, Dawn Lang, stated that the predicted drop did not necessarily have to indicate economic instability. Construction remains stable, and there is revenue growth in sales taxes, which was generated from restaurants, hotels, and retail, as claimed by Lang.

According to Lang, the city’s income in sales taxes last year was by $15 million larger than it had originally been budgeted. The main reasons were the construction at Intel Corporation facilities and other expensive projects in the area.

Several infrastructure projects of great importance are currently in the works at Intel’s Ocotillo site, which is located in the southern part of the city, just off Dobson Road. They comprise building and equipping of its Fab 42 semiconductor fabrication plant, which has been under discussion for a long time.

According to Lang, the said project, which ought to be finalized by the year 2020, made a significant contribution in terms of construction sales taxes. Nevertheless, construction sales taxes represent temporary collections instead of a constant source of income. That is the reason for a drop in tax money this year, as claimed by her.

Peoria also predicts lower construction sales taxes.

The city’s deputy director of finance, Barry Houg, stated construction had stabilized ever since reaching its peak in 2018. That results in construction sales taxes generating smaller amounts of money.

According to Houg, the city staff took it into consideration in the process of establishing the budget for the current year. That explains the minor increase of 1.5% in spite of the growth in taxes collected from restaurants and retail stores.

He stated that construction was a rather unstable area because of its dependence on the housing and market. He concluded by saying that the city of Peoria had been quite successful in the area. Nevertheless, it is not sustainable, which is why the city should not rely on it, according to Houg.

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