Council hears state legislative package that could cut local revenue and limit municipal authority

Rob Whistler, management analyst in the city manager’s office, told the Apache Junction City Council on Feb. 17 that a set of bills at the state Capitol could sharply reduce local revenue and curtail municipal authority.

“These bills would eliminate the ability for cities and towns to tax food for home consumption,” Whistler said, adding that the city could “lose about $3,500,000 annually” if the measure passed. He said the food-tax proposals had not yet been heard in committee at the time of his presentation but stressed looming committee deadlines that could determine their fate.

Whistler also described a proposal he identified as a house concurrent resolution that would effectively freeze local taxes and fees unless raised by a 60% resident vote. “If this were adopted, it would be extremely challenging for us because it would create structural deficits,” he said, warning the restriction could force cuts in services, deferred maintenance and staffing impacts.

Another item Whistler highlighted mirrors last session’s Wayfair discussions: a bill that would change the sourcing rule for online sales tax from the delivery address to the merchant or warehouse origin. He estimated Apache Junction receives roughly $1,800,000 a year in online sales-tax revenue that could shift to other jurisdictions under that change.

Whistler flagged bills he described as “problematic” that would allow developers or builders to use private providers for permitting and would constrain cities’ abilities to assess permitting fees or enforce some zoning and property-maintenance codes. He also warned of measures that would limit local design standards for single-family development, such as screening walls or fencing requirements.

The analyst closed by noting two near-term legislative deadlines for bills to advance from committees; he offered to keep the council updated and answered brief follow-up questions from council members.

Council reaction at the meeting included sharp criticism from an attendee who called the package “ridiculous” and accused sponsors of trying to “destroy the cities.” One council member described an exchange with a representative who told the council every city has a real estate tax; the council member disputed that characterization.

What’s next: Whistler said key committee deadlines were approaching that week, and staff said they would continue to monitor the bills and report back to the council.