NE Valley Times

The City of Scottsdale has expressed concerns over the potential impact of eliminating the residential rental tax, which currently contributes significantly to the city's budget. The removal of this tax is expected to generate an estimated $14.7 million in revenue for the current fiscal year, with about $10 million allocated to the general fund. This fund supports essential services such as police, fire services, parks maintenance, after-school programs, senior centers, and libraries.

In addition to general funding, the residential rental tax is projected to provide approximately $2.4 million for transportation funding. This money is used for maintaining Scottsdale's extensive network of roads.

While acknowledging the legislature's decision to send Proposition 400—a regional transportation sales tax renewal—to voters, city officials are concerned about losing a substantial source of operating revenue necessary for serving residents, businesses, and visitors.

Mayor David D. Ortega emphasized the gravity of the situation: "Eliminating the rental tax hits Scottsdale very hard. We are evaluating an annual revenue reduction of at least $14 million." He noted that discussions during the legislative session about increasing State Shared Revenues did not materialize and stressed Scottsdale's significant contribution to state revenues. Mayor Ortega stated that they would advocate strongly in future legislative sessions to restore their fair share.

Projected financial impacts indicate significant revenue losses starting January 2025 across various funds including general funds and transportation funds. The McDowell Sonoran Preserve Fund will also see reduced totals due to an expiring preserve tax by June 2025.

The city anticipates that future budgets will need adjustments reflecting these reductions and may require reassessment of service levels provided to residents around Arizona.