The Fountain Hills Town Council decided to send a $7M property tax initiative to the voters on the May 2018 ballot.

Councilmember Cecil Yates spent nearly 60 minutes talking to the Chamber’s public policy committee about the Town Council’s decision and possible scenarios.

While the official talking points and details have not yet been released by staff, the Town will be outlining the spending categories for the $7 million annual tax on property. Nearly 75% will be dedicated to under maintained roads which include many residential streets with cracks and potholes. 

This action is completely within the Council’s purview. After some debate the councilors agreed on raising an additional $7M per year though a primary property tax.

Before you make up your mind, yay or nay, I suggest understanding the impetus behind this decision. 

Budget shortfalls were predicted nearly 10 years ago and the Town Council has discussed, debated and heard from residents about the pros and cons of implementing a new tax. Yet, they have not passed a primary property tax.

Starting in FY’18 the Town budget begins to go into the red and continues that trend excessively well into FY’25. In fact, if the Town does not take action, they will be forced to cut programs, services, building maintenance and road upkeep.

The slow and steady increase in the cost of services, especially fire and police (at typically 5% per year) have not kept pace with Town revenues from major sources like sales tax, new construction and impact fees. 

As Mayor Kavanagh recently stated at several public events, there are two options to raise revenue. Either a primary property tax or an attraction that generates revenue and is profitable.

Recently, the Town Council eliminated the Crystal Lagoon proposal as a possible revenue source after receiving significant input from residents and business owners. That decision cleared the way for the Council to discuss a property tax.

The Fountain Hills Chamber Board of Directors will be discussing this issue at an up-coming meeting and has not yet taken a position.