In a campaign press release yesterday, embattled incumbent Scottsdale mayor Jim “Shady” Lane crowed that
“Tax Rates Are Low.”
In addition to refuting that claim based on what I know about our situation with property tax rates versus total tax collected, I did a little more digging on the general subject of Scottsdale taxes.
What you pay in sales tax at the cash register in a Scottsdale store is a combined rate of state, county, and city sales tax.
Ronald J. Hansen recently reported in the Arizona Republic (citing the Tax Foundation) that,
Arizona’s sales-tax rate is the 11th-highest in the nation, a national analysis of state and local tax systems finds.
At 8.25 percent on average, Arizona’s sales-tax rate narrowly trails California’s and is well behind Louisiana’s…
The Phoenix area had the 24th-highest average sales tax among metro areas with at least 200,000 residents. The Chicago area had the highest average sales tax, at 10.25 percent…
Arizona’s relatively high sales tax is at odds with its efforts to cultivate a reputation as a low-tax state, and reflects government’s need for revenue from some source as others are trimmed. Much of Arizona’s tax-cutting of the past 25 years has focused on corporate taxation and income taxes.
While we have Lane’s pal, Arizona Governor Dicey Ducey, to blame for the state’s oppressive tax environment, Lane has fully embraced the notion of cutting taxes for his wealthy friends. The rest of us taxpaying peasants are left to twist in the wind.
Scottsdale’s local, general sales tax rate is fairly low when compared to a list of other AZ cities. However, as I referenced in my previous article about property values, Scottsdale’s retail prices are higher and total average value of individual transactions is higher. Thus, even though the rate is lower, the total amount of tax paid is higher.
In fact, the aforementioned Jim “Shady” Lane has even bragged about how much tax money the city has collected, as if it’s a sign of good leadership!
Big increases from hotels, restaurants and retail shops led Scottsdale to a record $258.9 million in local tax revenue during fiscal 2015, beating the previous record of $251 million set in 2007, just before the recession [reprinted by the Shady Lane for Mayor campaign, from the Arizona Republic, December 28 2015].
Sales tax collections can be a good sign of healthy economic activity. But they can also be a sign of tax rates which are not competitive and thus not sustainable.
And speaking of hotels…under Lane’s “leadership,” the city hiked the bed tax to a whopping 5%! Is that high, you may ask? Yes, it’s in the top third of all major cities in the nation and the third highest rate in the metro Phoenix area! [From the 2013 HVS Lodging Tax Report, later reports have not yet been generally published].
So, even though you, the Scottsdale resident taxpayer, “enjoy” the rather high average sales tax rates shared by taxpayers in other Phoenix area cities, your taxpaying family and friends are screwed when they come for a visit.