Explaining Tempe's tax-increasing Proposition 424
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Tempe voters will decide a heated local issue this cycle — a sales tax increase.
Why it matters: Approving Proposition 424 would boost the city's sales tax 0.5 points to 2.3% — the highest of any East Valley city but still lower than that of Phoenix.
Catch up quick: In May, the Tempe City Council referred the proposed tax increase to the November ballot, citing the need to make up for $24 million in revenue lost when the Arizona Legislature outlawed rental taxes.
What's inside: The measure would raise the city's sales tax from its current level of 1.8%, meaning a $100 purchase would cost an extra 50 cents.
- 60% of revenue from that increase would go toward public safety measures.
- 20% each would go to public transit and early childhood care.
- Grocery purchases would be exempt.
Friction point: Exactly how that money would be spent — and how much it would raise — has become an issue leading up to Election Day.
- The measure is projected to bring in about $50 million a year, more than doubling what the city lost in rental tax revenue.
- Prominent critics — including Democratic state Sens. Mitzi Epstein and Lauren Kuby, the latter of whom is a former councilmember — have blasted the measure as disproportionately harming lower-income residents.
- Left-leaning opponents are also leery of giving more money to the city's police department and feel that the measure should have been broken into separate police, child care and transit questions.
What they're saying: "This is the wrong tax at the wrong time," Epstein told AZCentral. "People are struggling to pay their bills."
The other side: Six of the city's seven councilmembers support the measure, with council newcomer Brooke St. George remaining neutral.
- Fellow newbie Bobby Nichols, who won a council seat in March with Democratic Socialists of America support, tells Axios he has reservations but ultimately supports Prop. 424.
- Nichols notes that the council could ultimately spend the public safety revenue on a number of non-police efforts, including heat mitigation.
- "Within the next year or two, we'll be looking at about $20 million in cuts, which is absolutely going to impact the services that we offer to people," Nichols says, "and I find that very concerning."
What's next: Early voting runs through Nov. 3.