Arizona municipal league opposes bills to ban local grocery, rent taxes

Feb 3, 2023, 2:00 PM

(Photo by Brandon Bell/Getty Images)...

(Photo by Brandon Bell/Getty Images)

(Photo by Brandon Bell/Getty Images)

PHOENIX – The director of the League of Arizona Cities and Towns said state lawmakers are taking the wrong route trying to pull the plug on local food and rent taxes.

“I don’t want to make light of inflation, but this is a temporary problem. When you make a permanent solution like cutting taxes, you create issues,” Tom Belshe said Friday on KTAR News 92.3 FM’s The Mike Broomhead Show.

Republican bills to ban municipal taxes on groceries (SB1063) and rent (SB1184) are moving forward in the Arizona Senate after a committee vote on Wednesday.

“They’re trying to address inflation, which I think we can all agree on is a good thing to do,” Belshe said.

“The problem is we think they are doing it off the backs of local government. They’re not taking into account all of the complicated issues that surround that,” he said.

There are no state taxes in Arizona on groceries or rent. About 70 municipalities levy a tax on monthly rent, while 65 local governments collect taxes on food for home consumption, according to Senate Republicans.

Belshe said 5.7 million Arizonans don’t pay rental tax and 3.2 million don’t pay tax on food.

“When you take into account that you’re getting rid of those taxes and you’re actually not helping all Arizonans, we think there are better ways to help,” he said.

Rural municipalities often have to rely on local taxes more than places such as Phoenix or Tucson because they don’t have diversified economies, Belshe said.

For example, Taylor, a small town in the White Mountains, gets 35% percent of its general fund through its grocery tax.

“That food tax is an important way for them to provide the services that they do – public safety, water and sewer, roads, homeless services – all of those things that cities and towns provide,” he said.

Belshe’s organization doesn’t believe state money already earmarked for cities and towns will make up the difference in lost revenues.

“When they talk about how we’re going to have an increase in our shared revenue in the state, they neglected to talk about the things that they’ve done to keep us from getting windfalls. … They want to give the image that cities are awash in cash, but we are not,” Belshe said.

“We also suffer from the effects of inflation just like everyone else. Higher prices in hiring staff, higher prices in things like road repair, across the board. If you take income from us, it makes our job that much more difficult.”

Belshe said the league would prefer a short-lived solution.

“We think that since this is a temporary problem, you use a temporary fix … a one-time rebate of income tax,” he said.

We want to hear from you.

Have a story idea or tip? Pass it along to the KTAR News team here.

Arizona News

Three Arizonans are slated to speak as "everyday Americans" at the Republican National Convention i...

3 Arizonans to speak at Republican National Convention as ‘everyday Americans’

Three Arizonans are slated to speak as "everyday Americans" at the Republican National Convention in Milwaukee this week.

47 minutes ago

Taiwanese Semiconductor Manufacturing Co's new plant, as seen from the south. Access to labo...

Ron Davis/Phoenix Business Journal

Construction cost increases in Phoenix come in below national averages

Phoenix has seen a second consecutive quarter with construction cost increases of less than 1%, according to a new report.

58 minutes ago

A Fry's Food & Drug store in Arizona. (Photo by Heidi Donat)...

Andy Giegerich and Jeff Gifford/Phoenix Business Journal

Fry’s parent Kroger lists 73 Valley stores that would be sold in merger with Albertsons

Just over six dozen Safeway and Albertsons stores in the Phoenix metro are on a list of 101 Arizona locations set to be divested under the pending Kroger-Albertsons merger.

1 hour ago

A man was arrested after allegedly shooting another man in Glendale Sunday morning. (Glendale PD Fa...

Man injured after argument spurns shooting in Glendale

A man was arrested Sunday morning in Glendale for allegedly shooting another man during an argument, authorities said.

9 hours ago

Republican presidential candidate former President Donald Trump is surrounded by U.S. Secret Servic...

Weekend wrap-up: Everything you need to know about the Trump rally shooting

Between the shooting at a Donald Trump rally on Saturday and everything since, here are the top news stories from over the weekend.

10 hours ago

State Route 74 near Lake Pleasant has closed in both directions due to a crash, according to ADOT. ...

State Route 74 near Lake Pleasant reopened in both directions after crash

State Route 74 near Lake Pleasant was reopened in both directions Sunday after a closure due to a crash, according to ADOT.

12 hours ago

Sponsored Articles


Midwestern University

Midwestern University Clinic visits boost student training & community health

Going to a Midwestern University Clinic can help make you feel good in more ways than one.



Desert Institute for Spine Care is the place for weekend warriors to fix their back pain

Spring has sprung and nothing is better than March in Arizona. The temperatures are perfect and with the beautiful weather, Arizona has become a hotbed for hikers, runners, golfers, pickleball players and all types of weekend warriors.


Collins Comfort Masters

Here’s 1 way to ensure your family is drinking safe water

Water is maybe one of the most important resources in our lives, and especially if you have kids, you want them to have access to safe water.

Arizona municipal league opposes bills to ban local grocery, rent taxes