PHOENIX — The Phoenix City Council is considering increasing the city’s sales tax from 2.3% to 2.8%.
City leaders say the increase is needed because of a multimillion-dollar revenue shortfall. The state’s switch to a flat state income tax has resulted in less money being shared with cities and towns, they say. State legislation that eliminated the residential rental tax also has decreased city revenues. If nothing is done, the city anticipates an annual revenue loss of about $85 million in fiscal 2026, according to a notice of a proposed tax increase the city issued.
What would an increase mean for consumers?
On purchases where city sales tax is applicable, it would be an extra 50 cents on a $100 purchase.
The council discussed the proposal Tuesday and is expected to vote March 18. If approved, the new tax rate would go into effect July 1.
Some people who ABC15 spoke to said it’s the wrong time to be asking for a tax increase.
“It’s going to make everything more expensive when everything is way too expensive,” said Jenna Bojorquez, a Phoenix resident.
Kirk Davis, another Phoenix resident, said there should be no tax increase because people are already struggling to pay their bills.
But another Phoenix resident, Caitlin Barbaro, said she wouldn’t mind paying more.
“I’m not against it if it can be used wisely,” she said.
If approved, the increase would put Phoenix at the higher end compared to other Valley cities.
Here’s a look at how the proposed 2.8% in Phoenix compares:
- Buckeye: 3%.
- Glendale: 2.9%
- Mesa: 2%
- Scottsdale: 1.75%
- Chandler: 1.5%
Phoenix city leaders warned the council they would have to approve cuts to city programs and services if they didn’t find more revenue. Phoenix Vice Mayor Ann O’Brien thanked city leaders for their work on the proposed budget and for the proposals to dig the city out of a revenue hole that “is not of our creating,” she said.
Email ABC15 Investigator Anne Ryman at anne.ryman@abc15.com, call her at 602-685-6345, or connect on X, formerly known as Twitter, and Facebook.
