East Arizona News

Stripping away the residential rental tax will certainly help the bottom line for landlords and rental property owners, but it will hinder the ability of Scottsdale and other cities to deliver services to the people living in those properties. In Scottsdale, this tax will generate an estimated $14.7 million in the current fiscal year - about $10 million in the general fund, where it helps pay for police officers, fire fighters, parks maintenance, after school programs, senior centers and libraries. This year, residential rental tax will provide an estimated $2.4 million in dedicated transportation funding, used to maintain the city's network of more than 2,800 lane miles of roads.  

The legislature’s decision to send the regional transportation sales tax renewal (Prop. 400) to the voters is appreciated. This action, however, removes a substantial source of operating revenue, money that is needed to serve Scottsdale's residents, businesses and visitors.  

Future budgets will reflect this reduction, which may force reassessment of what services the city provides and at what level. We expect the legislature to continue work to offset this loss of revenue that will impact city services for residents around Arizona. 

Statement from Mayor David D. Ortega

"Eliminating the rental tax hits Scottsdale very hard. We are evaluating an annual revenue reduction of at least $14 million, money that is a critical part of how municipal governments around the state deliver essential services. During the legislative session there was discussion about making cities "whole" by increasing State Shared Revenues – which never materialized. Scottsdale contributes hugely to state revenues, and we will fight hard to restore our fair share in the next legislative session." 

City of Scottsdale Projected Financial Impact

		Projected Revenue Loss Starting January 2025
	Current Budget FY23/24	FY 24/25	FY 25/26	FY26/27	FY 27/28
General Fund	9,267,789	(4,786,694)	(9,952,026)	(10,249,852)	(10,556,589)
Transportation Funds	2,436,216	(1,258,274)	(2,616,079)	(2,694,370)	(2,775,000)
*McDowell Sonoran Preserve Fund	2,948,842	(1,523,040)	(1,448,641)	(1,407,240)	(1,439,536)
	14,652,847	(7,568,008)	(14,016,746)	(14,351,462)	(14,771,125)

*Note that a 0.2% City of Scottsdale Preserve Tax will expire in June 2025, which is why those totals are lower starting in FY25/26. The residential rental portion of the 0.2% Preserve Tax currently totals about $1.6 to $1.7 million annually.

Original source can be found here.