PHOENIX (AP) — The Arizona House on Wednesday approved a ban on cities and towns levying rent taxes on apartments and homes, a move that will save renters but cost municipalities an estimated $200 million a year. year.
The measure has the support of Republican Senate Speaker Karen Fann, meaning it is virtually certain to get a vote even though the legislature is in its final days before adjourning for the year.
“We’re trying to keep people at home,” Fann said Wednesday while explaining the last-minute resumption of the measure. “We’re trying to make sure that with these rising costs…we’re trying to help everyone here.”
The League of Cities and Towns of Arizona strongly opposed the bill that emerged in March but was blocked. The group representing municipalities argued that cities should either raise taxes elsewhere or cut services.
The group said 71 of Arizona’s 91 cities would lose funding to pay for police, fire and other services, while the tax cut would do little to help people who saw their rental payments to skyrocket.
Republican Rep. Shawnna Bolick of Phoenix touted her bill as a way to provide relief to people who have seen their rents soar this year. But Bolick amended the bill on Wednesday to delay implementation from Jan. 1, 2023, to Oct. 1, 2024.
That was partly to comply with a 2019 agreement the Legislative Assembly reached with cities not to change their tax authorities for five years. The deal came as lawmakers approved the automatic collection of taxes from internet sales, but limited the amount paid to cities.
“When you go to the gas station and have to pay almost $6 to fill up your car, there really isn’t anywhere else to get those dollars,” Bolick said. “So that will provide some relief to our tenants that we have across the state in cities that are applying a (tax).”
Four House Democrats joined all but one Republican in supporting the measure, which passed 33 to 25.
Republican Rep. Brenda Barton de Payson opposed the measure, saying the Legislature takes away the ability of small towns and villages to decide what taxes to levy to support their governments.
Fann said municipal revenues have skyrocketed along with state tax revenues. The state has a historic surplus of $5.3 billion this year, and cities are getting a share of that revenue.