Core Principles

The League of Arizona Cities and Towns is guided by two core principles:

1. Preserve local decision-making; and
2. Protect shared revenues.

Legislative Priorities

The League supports legislation respecting the role of municipal government and its core principles and opposes measures that undermine them. The following policy priorities were developed with input from our members, approved by the League's Resolutions Committee, and will ensure that cities and towns can maintain the high-quality municipal government services that businesses and citizens rely on.

Protect Local Revenues

• Preserve Residential Rental and Food Taxes to ensure that municipalities may continue to provide vital services to their population, now and in the future.
• While not all 91 cities and towns levy such taxes, and each municipality that imposes the tax provides specific exemptions to alleviate the burden on low-income households, the elimination of these taxes would reduce overall local revenues by more than $300M.
• Without these taxes, communities throughout the State would be forced to reduce or end services their residents have come to rely on. In some jurisdictions, food tax revenues make up 20% or more of their Public Safety budget. In other towns, residential rental taxes approach 15% of total General Fund revenues.
• Revenue losses of this magnitude are plainly unsustainable for many cities and towns. Therefore, it is imperative that local governing bodies preserve their taxing authority in these areas to protect the welfare of their residents.

Municipal Tax Code Commission

• Continue the Municipal Tax Code Commission (MTCC) and appoint new members to fill vacancies so that the MTCC can reconvene and address the needs of Arizona cities, towns, taxpayers, and businesses.
• The Commission's duty is to hold public hearings and consider proposed amendments to the Model City Tax Code (MCTC) – a uniform local sales tax code applicable in all cities and towns which includes several approved options each municipality may choose from to optimize its sales tax code in relation to its local economy.
• Since no city or town can change its tax code without MTCC approval, the Commission is the primary avenue for elected officials and taxpayers to address local TPT issues. An active MTCC allows cities and towns to react to taxpayers' concerns and change the MCTC when necessary.

Affordable Housing

Cities and towns throughout Arizona are working diligently to address the issues of housing affordability and homelessness in our state. According to the Maricopa Association of Governments, there was a 35% increase in unsheltered homelessness from 2020 to 2022. Moreover, one-third of seniors throughout Maricopa and Pima counties are cost- burdened, meaning they pay more than 30% of their income for housing and may have difficulty affording other daily necessities such as food. These issues cross municipal boundaries and require a strong partnership between the state, local governments, and the continuum of care providers.

The League and its members were pleased to participate in the Housing Supply Study Committee to discuss and propose solutions to our state's housing challenges. We look forward to working with the legislature to advance commonsense policies that provide cities and towns with resources to address homelessness and develop affordable housing options. Such policies include process improvements that will more quickly lead to housing project completion without compromising residents' health, safety, and welfare, while also increasing efficiency and reducing approval timeframes. Additionally, local governments will continue to work collaboratively with housing developers to establish best practices to foster growth in the housing stock.

Below are additional concepts that the Legislature should consider:

• Establish a robust, ongoing funding source for the Housing Trust Fund
• Eliminate the preemption on inclusionary zoning
• Create a state program to hold developers harmless for lost one-time revenue associated with building affordable housing units as part of a project
• Establish a state-level emergency rental assistance program
• Authorize tax increment financing for affordable housing
• Enact a source of income non-discrimination statute

Housing Trust Fund

• The League and its members are grateful for the unprecedented $60 million investment the FY 23 budget made in the Housing Trust Fund (HTF). The HTF represents the most valuable resource available to the Department of Housing for housing development and other critical assistance programs such as shelters, transitional housing, eviction prevention, and rapid rehousing. Cities and towns remain committed to supporting additional and ongoing investments in the fund.

Efficient Government

• Create parity and transparency for individuals who post political signs with existing requirements for candidates and ballot measures.
• Remove duplicative meeting requirements for local governments when adopting local budgets.
• Remove redundancies when declaring ordinances and exhibits public record for purposes of public posting.

Transparency

• Provide cities and towns flexibility to meet public posting requirements by publishing notices on the municipality’s website. Increasingly, residents are turning to online resources to stay updated on community announcements and news. This commonsense solution will increase access to published notices and allow municipalities to direct cost-savings to resident priorities.

Neighborhoods

• Provide a statutory mechanism to give the Department of Liquor & License Control the authority to grant local governments an extension of the time allowed to review and act on liquor license applications when needed. This long-time practice at the department was recently halted due to a new interpretation of the law. Cities and towns may need to request an extension of time prior to making a final recommendation to allow applicants an opportunity to supplement an incomplete application or resolve findings that would otherwise cause the local government to recommend a denial to the department.
• Clarify statute to ensure municipalities have the proper authority to submit their General Plan to the voters to address rare situations in which municipalities have a General Plan previously approved by voters combined with a decline in population, placing the city or town below the population threshold requiring them to take their General Plan to the ballot for approval.