Tempe council directs staff to prepare ballot measures for 0.4% public-safety sales tax and 0.1% transit tax to replace lost revenue

Tempe Mayor Corey Woods and city staff told the City Council at a work study session that recent state and federal policy changes have created a structural revenue gap and recommended two voter-directed sales-tax measures to restore and stabilize core services.

Deputy City Manager Lisette Camacho, who presented the proposals alongside Municipal Budget Director Robert Baer, said citywide revenue losses tied to the repeal of residential-rental taxation and other changes total roughly $21.7 million annually across three funds. "The repeal of residential rental resulted in a total of $21,700,000 in revenue loss across three funds," Camacho said, citing a $14.4 million hit to the general fund, about $6 million to the transit fund, and roughly $1.3 million to arts and culture.

To address the shortfall, staff proposed two measures to send to voters: a 0.4 percentage-point local sales tax dedicated primarily to public safety and a 0.1 percentage-point increase in the transit tax. Camacho said…