(The Center Square) – Scottsdale’s sales tax proposition on the ballot in November might lead to a new tax slightly lower than the current tax, but it would still pose a notable cost to residents each year, according to a new Common Sense Institute report.
The report suggests that an added tax burden of $245 would be placed on the average household if Proposition 490 is passed into law, and it would create an estimated $46.5 million in revenue for the city annually, or a total of $1.4 billion over 30-year length of the proposed tax.
The new sales tax of 0.15% would start on July 1, 2025, if passed into law, and it would replace the expiring 0.2% tax, and it would be spent on public services like land preservation.
“While the proposed extension would provide necessary funding for parks and preserves, it also introduces a significant long-term tax burden on households,” Glenn Farley, CSI Director of Policy and Research, stated.
“This decision is set against the backdrop of a city budget that has grown substantially faster than both population growth and inflation over the past three decades. As voters, it’s essential to take into account the historical context and the potential economic trade-offs to ensure that Scottsdale’s future remains financially sustainable,” Farley added.
Notably, the report states that the tax will have a “minimal” economic impact overall because it is a city tax that is somewhat minor compared with other taxes that generate government revenue.
The city narrowly approved a recent change to the language of the proposition on the ballot following a lawsuit from the Goldwater Institute. An Arizona Court of Appeals ruled in favor of the conservative think tank, saying that the city was deceptively phrasing the new tax as a cut despite the old tax expiring.
The language was then adjusted within a narrow time frame, which kept the proposition on the ballot, along with other proposals, a mayoral and city council race in the city this November.