The City Council will consider Tuesday whether to pursue a proposal to increase the sales tax to 9.2%. On Tuesday, the council is expected to decide whether to schedule a vote on the measure at its Sept. 11 meeting and put it before voters in a March 2025 election.

The City Council must make a decision by its Sept. 11 meeting setting the legal date for such an election, City Manager Tim Thomure said in a memo. Raising the city’s sales tax to 9.2% is expected to generate about $80 million annually, the memo said. The higher tax rate will remain in effect for 10 years.

The base sales tax in Arizona is 5.6%. Pima County adds 0.5% more for the Regional Transportation Authority. In Tucson, the sales tax is currently 2.6%.

The additional sales tax, called the “Safe and Vibrant City” ballot measure, would be divided among five areas considered “quality of life categories,” the city said.

• Money for first responders: $24.6 million, mainly for police cars, fire trucks and various equipment: 30.75%

• Improved emergency response: $18.2 million, primarily for hiring additional police officers, firefighters and emergency dispatchers: 22.75%

• Affordable housing and shelter, $14 million, primarily for various homeowner and renter assistance programs: 17.5%

• Neighborhood and community resilience, $13.4 million primarily for workforce development, neighborhood improvements and early childhood programs: 16.75%

• Technology investments, $9.8 million for body cameras, radios and a more modern police air unit: 12.25%

As part of the information for Tuesday’s meeting, city staff prepared a presentation that provided a sample tax revenue budget and listed funding for each of the five “vital areas.”

The tax is necessary, the city manager’s memo says, because the state legislature has passed laws that have “reduced local control and created financial challenges for cities like Tucson.”

House approval of a 2.5 percent “flat tax” signed by former Governor Doug Ducey in 2022 “significantly reduced statewide tax revenues” and handed over revenues that cities like Tucson relied on to the state, the memo said.

In an op-ed published today in the editorial pages of the Star, Mayor Regina Romero describes the “dire” situation the city is in because of the state’s flat tax. It will result in a $27.4 million cut in the city’s state revenue in the current fiscal year, Romero says.

“To put these massive cuts into perspective, a $27.4 million cut could result in a 20 percent reduction in the city’s housing authority,” she writes. “A cut of that magnitude would be equivalent to taking 168 Tucson firefighters, with all their gear and personal protective equipment, or 100 Tucson police officers, with their patrol cars and personal protective equipment, off the streets.”

The implementation of the flat tax, Romero says, has resulted in a $1.3 billion deficit at the state level this fiscal year and forced the City Council to prioritize its recently passed budget “at the expense of any potential new spending for additional housing needs, public safety services, investments in our parks or our roads and infrastructure.”

Because of the state flat tax and declines in other state-supported tax revenues, the city is forecasting “further declines in state-supported revenues” over the next two fiscal years and a total “loss of nearly $400 million in state-supported revenues over the next ten fiscal years,” Thomure said in his memo.

“In addition, the state legislature’s ban on cities from levying residential rent taxes will reduce the revenues of 75 Arizona cities and towns by $230 million beginning in January 2025,” the memo said. “Although Tucson does not levy a residential rent tax and will not be directly affected by this reduction, we anticipate that all Arizona cities and towns will ask state legislators for relief unless state revenue-sharing formulas are reformed.”

Council member Kevin Dahl told the Star on Friday that he viewed the potential sales tax as a “transfer” of what was already supposed to come from the state.

Dahl said his personal philosophy is that he is OK with higher taxes “as long as you get good value for your money.” Dahl said he hopes Tucson residents will have the same attitude toward the proposed sales tax increase “when they see what you get for it.”

“It’s a total package. You’re going to get a lot for safety, not just the new equipment that’s needed, but more safety officers who can respond and help people in non-violent situations where arrests aren’t happening,” he said. “People who can do the paperwork and support the police so they can do that job. That includes safety navigators and housing navigators for at-risk people, more money for preschool stuff… It’s a wonderful investment (and) I think we’ll be able to make that argument successfully when we put it to voters.”