Town Council Explores New Tax Options to Address Road and Public Safety Costs

The Oro Valley Budget and Finance Commission meeting on August 19, 2025, focused on the town's financial challenges, particularly concerning public safety and road maintenance costs. The discussions highlighted a significant increase in expenses, with public safety costs rising by 23% since fiscal year 2021, while road maintenance costs have surged by 107% during the same period.

The meeting revealed that these rising costs have absorbed 80% of the general fund revenue growth, prompting the need for the town to augment its road fund with transfers from the general fund. The inflation affecting road maintenance services, particularly those reliant on petroleum-based products, has been a major contributor to these rising costs. Despite a recent decrease in oil prices, the costs of road treatments have not seen a corresponding decline, largely due to a shortage of service providers and labor in the area.

The commission also discussed the town's sales tax revenues, which have remained flat over the last three years, contributing to the financial strain. Oro Valley is reportedly losing approximately $1.8 million in taxable transactions due to retail leakage, equating to a potential revenue loss of around $45 million. Efforts to encourage local shopping are ongoing, but challenges persist.

To address these financial pressures, the commission is exploring new tax categories that could provide additional revenue. These include a use tax, a commercial rental tax, and a telecom tax, which are already implemented in surrounding communities. The proposed taxes are expected to primarily impact businesses, with limited effects on residents.

The meeting underscored the urgent need for Oro Valley to find sustainable solutions to its budgetary challenges, particularly in maintaining public safety and road quality, which are top priorities for the community. The commission's discussions will inform future budget proposals and strategies to enhance the town's financial health.