Committee backs moratorium on municipal rate and fee increases, sparking split testimony
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Summary
HB 4030 (and companion HCR 2052) would bar municipalities from raising tax rates, transaction privilege taxes, certain fees and utility rates through June 2030; the committee returned both measures with due‑pass recommendations after extensive testimony from cities, water groups and business advocates.
The House Ways and Means Committee returned HB 4030 and the companion referral HCR 2052 with due‑pass recommendations after hours of testimony that sharply split municipal officials and local tax‑restraint groups.
Sponsor described HB 4030 as a moratorium on municipal rate and fee increases from July 1, 2026 through June 30, 2030 and said the measure caps rates (not revenues) to help Arizonans cope with high costs of living. The sponsor argued growth in general‑fund budgets and past conformity choices justify a pause on local rate increases.
Opponents — including the League of Arizona Cities and Towns (Renee Guillen), the Arizona Municipal Water Users Association (Barry Aarons), the County Supervisors Association (Craig Sullivan), and local mayors — warned the moratorium would restrict utilities and enterprise fund management, interfere with required federal loan matches, and limit municipalities’ ability to respond to water‑supply and infrastructure crises. Barry Aarons warned of rising Colorado River stresses and said “any limitation you wanna put on a city that is trying to maintain and build its water infrastructure through taxation is something you do not wanna do facing that crisis.”
Supporters such as the Arizona Free Enterprise Club (Greg Blackie) argued cities have benefited from revenue growth (including Wayfair and changes to urban revenue sharing) and urged restraint on rate and fee hikes to control costs for residents. Katie Proctor, speaking for the City of Maricopa, told the committee the city’s local half‑cent sales tax helped close a $140 million gap for SR‑347 improvements and said the local action unlocked state funds so "we will now turn dirt this summer on 3 47 improvements." Several rural mayors warned that delayed rate adjustments could threaten compliance with federal loan covenants and necessary wastewater and water projects.
After extended questioning and debate about local control versus statewide affordability, the committee moved and returned HB 4030 with a due‑pass recommendation by a 5‑4 vote. The committee also returned HCR 2052 (the ballot referral) with the same 5‑4 vote.
