Phoenix is considering raising its sales tax by half a percentage point, to 2.8%.
The last estimate has Phoenix facing a budget shortfall of up to a $100 million.
City leaders blame the state for cutting revenue by moving to a flat income tax and eliminating a residential rental tax. Phoenix has also been paying more for goods, services and employees. Plus, federal COVID-19 response dollars through the American Rescue Plan Act are running out – Phoenix received nearly $400 million over two years.
According to the city, detailed information on the forecasted budget and multi-year forecast will be presented to the council on Feb. 25. The proposed tax increase will be considered by the City Council at a policy meeting on March 18. The next budget begins July 1, 2025.
Phoenix created a document with the history of sales tax increases and the reasons behind them.
EDITOR'S NOTE: This story has been updated to correct when a budget report will be made to the council.
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