Republican lawmakers are considering cutting food and rent taxes to help Arizonas cope with soaring inflation, but city officials say doing so won’t hurt people in need. It doesn’t help and warns that it actually increases costs elsewhere.

Eliminating taxes was part of the Republican majority’s priorities for this session and was on the Senate Republican agenda. plan Published last month. Several bills have been introduced in the House and Senate. both the goalA similar effort to abolish the rental tax last year led to defeated.

However, on February 14, a new Rental tax proposal It successfully passed Congress, and Republican leaders immediately touted the achievement, seeking approval from Governor Katie Hobbs. However, as of Friday, the bill had not yet been sent to the governor’s office.

Senate Speaker Warren Petersen lamented at a February 15 press conference, “The government is doing very well, but Arizonas are reeling from inflation.”

Arizona, especially Silicon Valley, was hit hard by last year’s inflation. Phoenix is National highest rate in big cities, 12%.According to experts, the New Year ease the burden,they again, recession.

Republicans also support tax cuts to put more money in the pockets of Arizonas, noting that they would have a huge impact on the hardest-hit people in a state already grappling with skyrocketing housing costs. Arizona ranks among the five worst states for affordable housing. 26 options available per 100 low-income households.

“(Rental tax) is a very clear cost that is passed on to tenants who are overwhelmingly low income,” House Speaker Ben Thoma said at the same press conference. “I urge the governor to sign and give relief to Arizonas, especially as home prices continue to rise.”

However, the Arizona Federation of Municipalities, which represents Arizona’s 91 municipalities, argues that not all cities and towns benefit from these taxes, and that some are dependent on their revenue. doing.

League analyst Lee Grafstrom said the fees themselves had negligible impact on Arizonans. The average food tax rate is about 2.7%, adding about $2 to a $100 grocery bill. The average rent tax rate he has is 2.5%, and a monthly rent of about $1,200 will cost him about $30.

However, the income generated by toll-charging cities is high, and that money is used to provide a myriad of city services. With both taxes, Glendale makes $22 million a year.

“These are big ticket items,” says Grafstrom. “And they are a very important source of income for cities and towns.”

The league estimates that cutting both taxes would cost cities and towns statewide more than $300 million combined. Grafstrom added that some areas, particularly rural Arizona, will feel the effects more acutely. accounted for 35% of

Opponents of tax cuts argued that the lack of funding would force cities to either scale back other vital services such as public safety, or raise other taxes to cover the costs, and the gains to be made by eliminating them. warned that it would effectively offset any gains that could be made.

Republican lawmakers dismissed the move as scare-mongering on the left, but Glendale Mayor Vicky Rios said it was a necessary argument.

“Public safety is the largest part of our General Budget and these are the revenues that support the General Fund,” she said. It would be very difficult to imagine.”

Glendale allocates 73% of the general budget to local police and fire departments.

Petersen defended the reduction State and local governments have benefited from large income tax and sales tax revenues over the past few years, which should provide a cushion for loss of funds. These states’ shared revenues are projected to increase in the next few years, he added.

But Rios said that ignores the rising costs and looming recession facing the city in the same way Arizona people struggle every day. It is not known exactly how long or how severe it can be.

“Tax revenues may be rising, but so are costs,” she said. “Cutting earnings at the same time that we think a recession is coming will only make it more difficult.”

Provisions in the rent tax bill delayed its effect until next year and instructed state treasurers to secure $14.9 million from the state General Fund by June 2025 and to eliminate cities and towns that previously used the rent tax. is instructed to distribute to The bill also includes a “legislative intent” clause that cities should cut spending from non-essential spending, particularly out-of-state travel and lobbyist expenses, to make up for lost tax revenue. I’m here.

Senator Steve Kaiser (R-Phoenix), the sponsor of the Senate version of the bill, said:

Another argument from detractors that landlords can simply pocket the extra dollars without reducing the burden on tenants is an amendment that would require landlords to reduce overall rent by the tax amount. It has been dealt with.

But Arizona law is lax when it comes to protecting tenants from arbitrary rent increases, so it would be easy to undermine the bill’s efforts to provide relief to tenants.State Law Ban Cities from Imposing Rent Regulationsand as a result, surge in recent yearsAttempts from Democratic lawmakers to rectify were promptly overruled by the Republican majority.

Grafstrom added that Arizona residents most in need are already benefiting from federal and local assistance. The Federal Supplemental Nutrition Assistance Program 800,000 Arizonas by 2021 People living in the households listed below 130% of poverty leveland low-income housing programs such as Rent cap Section 42 properties and federally subsidized Section 8 housingalready exist to alleviate severe housing insecurity and are often already rent tax exempt.

Local city initiatives are increasing social safety nets for struggling families through housing assistance programs, food banks and shelters. From March 2020 to this year, Glendale has spent more than $40 million of her time helping residents facing housing insecurity. City spokesperson Derek Diesner said in an email that investing in local initiatives would be one way legislators can help Arizonans in need.

The rent tax bill was approved by the state House of Representatives on February 14 and was sent to Hobbes. However, two Tucson legislators – Alma Hernandez and Consuelo Hernandez – voted to approve the bill. Cities without rent tax.

But despite its limited support, Hobbs appears poised to reject the proposal. His spokesman, Josselyn Berry, said: arizona mirror Hobbs believes the bills aren’t where they should be and aren’t currently offering profitable savings to Arizonans who rent.

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