League warns Tri City officials of state bills on fees, short-term rentals and food tax

Renee Guillen, deputy director of the League of Arizona Cities and Towns, told the Tri City Council on Jan. 15 in Lake Havasu City that several bills introduced in the 2025 legislative session could affect local government revenue and authority.

Guillen said the governor’s state of the state highlighted housing measures the League supports, including renewal of a state Low Income Housing Tax Credit program, and signaled attention to short-term rentals. She said the governor also proposed pay raises for the Arizona Department of Public Safety, corrections officers and state firefighters — a move Guillen warned could create budget pressure on local governments if counties or cities must raise pay to retain staff. “A 5% raise for those 3 categories of employees … is a budget constraint that, you know, sounds good,” Guillen said.

Why it matters: Several bills noted by the League would directly change local authority or revenue. Guillen described Senate Bill 1013 as a proposal that would require a two-thirds supermajority for cities, towns and counties to impose or raise any fee, tax or assessment, which she said could sweep broadly to include routine user fees. She also said lawmakers will again consider short-term rental legislation aimed at restoring or clarifying local authority, and that the League supports measures that allow local caps, density limits and buffering requirements.

On food tax, Guillen said there are proposals to preempt local food taxes. When Bullhead City Council member Gene O’Neil asked whether the goal was to lower, raise or eliminate the food tax, Guillen replied, “They’re trying to eliminate it.” She explained that in many small Arizona cities a significant share of transaction privilege tax revenues comes from food-for-home-consumption taxes.

Guillen said the League is also watching election-related bills that seek to speed tabulation and might affect clerk operations and county contracts, and she noted an effort to craft a “starter homes” bill that would avoid broad design preemption. The League plans to pursue a sponsored short-term rental bill, she said, and is engaged on LIHTC renewal.

The presentation was informational; no formal action was taken by the Tri City Council on state legislation during the Jan. 15 meeting.

Speakers mentioned in this article included Renee Guillen and Gene O’Neil.

Ending: Guillen urged the cities to speak up against statewide preemption of locally set taxes or fees and to press for local control where possible.