[{"_1":2,"_87":-5,"_88":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,75],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},"mediaId",6503165,"mediaKeyId","5602153-d739b4236b587410e01cc8688597f9bf","parentId",5602153,"title","Oro Valley staff outline proposal for use, commercial rental and telecom taxes, plus stormwater rate increase","audioSeconds",2217,"startMs",1517000,"endMs",3734000,"viewUrl","/Search/View?dp=1&key=5602153-d739b4236b587410e01cc8688597f9bf&start=1517&end=3734","thumbnailUrl","https://assets.pipeline.soar.com/5602153-d739b4236b587410e01cc8688597f9bf/thumbnail_1517000.jpg","articleUrl","/articles/6503165/Oro-Valley/Pima-County/Arizona/Oro-Valley-staff-outline-proposal-for-use-commercial-rental-and-telecom-taxes-plus-stormwater-rate-increase","mediaUrl","https://secure.pipeline.soar.com/6503165-6dee8da24a844560b7cea8a91d6cd325/orig.mp4?Expires=1770919967&Signature=DfSsKQJuCE2YcjXKJP9nC~QebCsB61fzD6Xu2QXZhXiSdaxu0lSjiJ3dOYR2ILitKXChTfOUMMrq9XA5IAF5LTUxhB7oUbB4bdxXVCyhO4jZGVHukdQSXgg~LbDPkif2QifCjsZGj0ijUngLI7DGo8kfcYlIibb-iOVvrMiVO3p4B2hS9E71lNVJnlPRmK1~8PJP1o4KRrp0yieYfBZl9uW8~-2gtbE2AC3Rr7-D3N1vdN2TuYJHCjwuEDdolqwN543-hA650vfiddRRZ1sc4mgh0N-q5susR~tVdKRPDX1Wyiapqa2eJs9JEVL5SIO~nLN3nReyYLxqQSXgF09SMg__&Key-Pair-Id=KUT5TJCACFTXG","author","Oro Valley","date","2025-08-19T00:00:00Z","article","David Gephard, a town staff member, presented possible new tax categories and fee changes to the Oro Valley Budget and Finance Commission on Aug. 19, describing the measures as options to address rising public-safety and pavement-preservation costs.

Gephard said the town is considering three tax categories not currently charged by Oro Valley: a use tax, a commercial rental tax and a telecom tax. He described the proposal as focused on capital funding and said staff’s intent is to direct new revenues toward capital needs such as a future police facility, police vehicles and road maintenance. “These new tax categories we are proposing… would be assigned for capital needs and capital purposes,” he said.

Why it matters: Gephard told the commission that public-safety costs have risen faster than the town’s revenue growth and that pavement-preservation costs have increased about 107 percent since 2021, forcing transfers from the general fund into the highway fund. He said local sales-tax growth has been essentially flat for the last three years and that Oro Valley also faces “retail leakage” when residents shop outside the town.

How the proposed taxes would work, according to staff:
- Use tax: equalization tax on purchases made outside the state where sales tax was not charged; staff estimated a potentially wide collection range and modeled examples (e.g., $10,000 a month in out-of-state purchases would generate $250 monthly at a 2.5 percent rate). Gephard said the use tax has the highest volatility and the town lacks highly granular state data to predict collections precisely.
- Commercial rental tax: a tax on business leases and some storage rentals that would primarily affect businesses paying rent. Staff said small storage renters would see small increases while larger commercial leases would generate more revenue.
- Telecom tax: a monthly charge on telecommunications bills; Gephard provided sample impacts (a $50 monthly cellphone bill would add about $1.25 at 2.5 percent).

Gephard said staff have discussed the proposals with business stakeholders, including the Oro Valley Chamber Board and Roche’s corporate tax team. He said Roche’s tax staff indicated the telecom tax was the item of greatest potential impact for their operations but did not anticipate major operational impacts from the other categories. The Chamber Board, he said, raised equity concerns and suggested a property tax would be more equitable but that a property-tax measure would require a vote and likely face community resistance.

Stormwater fee: Separately, staff proposed a stormwater-rate increase—about $2 per month for many small businesses or residents—saying the stormwater fee has not been increased since 2016 and currently covers operations but not capital needs. Gephard said the stormwater fund completed the Sierra Wash capital project and that federal grant revenue will be recorded at fiscal year-end.

Commissioners raised outreach and equity concerns. Commissioner Mason noted worries that a commercial rental tax could disproportionately affect small businesses that already face relatively higher rents in Oro Valley; Gephard said he had heard that concern and that the town may offer phased or tiered options. Commissioner Kesey asked which portion of the pavement-preservation gap the proposed taxes might cover; Gephard said estimates for the use tax ranged from about $900,000 to $1.8 million and that midpoint collections could materially reduce the gap but that predictions are uncertain. Vice Chair Carlsberg asked whether staff had considered adjusting the general sales-tax rate instead; Gephard said raising the sales tax could be considered later but his preference was to first pursue categories that bring Oro Valley in line with neighboring jurisdictions.

Next steps: staff said outreach will continue with a business forum on Sept. 11 and additional presentations; the town plans a council study session on Oct. 1 and a council decision discussion on Oct. 15. Gephard emphasized that the commission’s role at this stage is advisory and that no final decision had been made.

No formal vote was taken on the tax or fee proposals at the Aug. 19 meeting; staff requested feedback and further outreach before a potential council recommendation next month.","mediaType","Video","parentTitle","Oro Valley - Budget and Finance Commission","oneSentenceSummary","Town staff presented options to add a use tax, commercial rental tax and telecom tax and proposed a stormwater fee increase to pay for police facilities, pavement preservation and other capital needs.","taxTitle","Oro Valley, Pima County, Arizona","taxId",55016,"location","headline","","shortSummary",{"_33":76,"_35":36,"_37":38,"_39":77,"_41":78,"_43":79,"_45":80,"_47":81,"_49":82,"_51":83,"_53":84,"_55":56,"_57":58,"_59":85,"_61":62,"_63":64,"_65":86,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},6503169,"Oro Valley projects small FY25 general-fund shortfall; spending savings, higher interest income reduce draw on reserves",992,307000,1299000,"/Search/View?dp=1&key=5602153-d739b4236b587410e01cc8688597f9bf&start=307&end=1299","https://assets.pipeline.soar.com/5602153-d739b4236b587410e01cc8688597f9bf/thumbnail_307000.jpg","/articles/6503169/Oro-Valley/Pima-County/Arizona/Oro-Valley-projects-small-FY25-general-fund-shortfall-spending-savings-higher-interest-income-reduce-draw-on-reserves","https://secure.pipeline.soar.com/6503169-ab5b946210262db7d2dfc1a673b5cd5b/orig.mp4?Expires=1770919967&Signature=QK~VHK0tEmBNQ78Mmy26teoECdNZytlVulSO8JcK2x8UUXOpFOS7w8W7SYwvEAUgWD3lmJzLleXlWWI8f7rM~pm9DhMkda9UbTxmOBYVXm2n1XGUCc8QD70me1coODa1Il1YQ2ihgP2SSl41RP6wddC-IDj0AnTfIqEAijvOEwECEwXeyKFkatxbOAI6hmVhYLCGpstSrI8Sua3YD6nkG5qS5ohP5txj~mADNKG660VmlFZpws~X~FWnWaw2LFerWZvU34r9O9NeCemgUM3YOnL4G0byz1jU0kyFS3rDoVwf9~N~xneswV9A1OxxZfcYdsfLL1sXOf2XyDTYxO6kBg__&Key-Pair-Id=KUT5TJCACFTXG","David Gephard, a town staff member, told the Oro Valley Budget and Finance Commission on Aug. 19 that the town’s general fund is tracking slightly below last year while savings on spending and unexpectedly strong interest income are narrowing a projected budget gap.

Gephard said town revenues through May are “down about 4 percent year over year,” driven mainly by local sales tax and state-shared revenues, but that personnel vacancies and operating savings are trimming expenditures. “We are expecting for our year-end estimate to come in just a bit under budget, about $170,000,” he said.

The update matters because the general fund pays for core services the town prioritizes, including public safety and pavement preservation. Gephard told commissioners that projected savings in personnel and operations and maintenance will reduce the planned use of general-fund balance from roughly $4.1 million in the budget to about $2.3 million as of the May estimate, and that the town’s 30 percent expenditure reserve policy remains exceeded by an estimated $4.4 million.

Key figures presented by staff included: local sales-tax collections down about 3 percent year over year; state-shared income-tax receipts lower by about $2.1 million; and licenses and permits already over budget, helped by single-family residential permits (106 through May versus 95 budgeted). Gephard said building-permit collections through May were roughly $970,000, below last year’s $1.2 million, but that the town expects to exceed the current-year budget for residential permits.

Interest earnings were substantially above budget, Gephard said, noting the budgeted amount for interest was $400,000 but actuals were just under $800,000 through May. He also said a one-time rebate from AM RRP was reflected in miscellaneous revenue.

On expenditures, Gephard reported the general fund was at about 84 percent of budget through May and that staff project approximately $1.3 million in personnel savings and $400,000 in operations-and-maintenance savings, producing roughly $1.7 million in total projected expenditure savings for the general fund.

Other funds: the highway fund is expected to finish roughly on budget with capital and O&M savings improving the year-end estimate; the community center fund is outperforming budget—revenues were at 105 percent through May and the fund is now projected to add about $750,000 to fund balance rather than use $115,000; the capital fund showed project rollovers with about $4.5 million spent through May against a $10.3 million budget; the water utility fund is tracking above budget on revenues and is expected to add more to fund balance than anticipated; and stormwater has modest savings and a nearly completed Sierra Wash project that will post a federal grant at fiscal year-end.

Commissioners questioned specific line items in the presentation. Commissioner Mason asked about membership dues showing an 11 percent increase while total membership rose about 1 percent; Gephard said he would have to follow up with more detail. Vice Chair Carlsberg asked whether underspending by departments could cause issues later; Gephard cautioned about typical year-end spending patterns and said staff will monitor and provide a full-year June report next month.

Commissioner Kesey asked how confident staff were that proposed new revenue measures (discussed later in the meeting) would close the town’s pavement-preservation shortfall. Gephard said the town’s estimate for a new use-tax category ranges widely and that an initial midpoint could cover a meaningful portion of pavement-preservation cost increases, but he cautioned uncertainty and the need to monitor collections over time.

The presentation closed with staff offering supplemental materials in the meeting packet and inviting further questions at the next report, which will include the full fiscal-year close.

Votes at a glance: the commission approved the minutes for the May 20, 2025, and June 17, 2025, regular-session meetings by voice vote. Commissioner Mason moved to approve the May 20 minutes; Commissioner Gazzi seconded. Commissioner Mason moved to approve the June 17 minutes; Commissioner Agnese seconded. The motions passed by voice vote.","Town staff told the Budget and Finance Commission that revenue through May is about 4 percent below last year but expenditure savings and higher interest earnings are reducing the projected draw on the general fund.","actionData","errors"]

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Oro Valley staff outline proposal for use, commercial rental and telecom taxes, plus stormwater rate increase

Oro Valley projects small FY25 general-fund shortfall; spending savings, higher interest income reduce draw on reserves