Gilbert expects to lose as much as $1 million a year in tax revenue because legislative tax cuts that town officials say could sap funds from the police or fire departments.
Gilbert is now reviewing preliminary figures as it begins the first stage of preparing its budget for fiscal year 2007-08.
The cuts affect every municipality in the state.
“Anytime you’re talking about reducing the amount of money we have available to provide services, we’re concerned,” Town Manager George Pettit said. “It’s not good news.”
It comes at a time when Gilbert also is facing lowerthan-expected sales tax revenue from retail sales after many major stores, including a Sam’s Club and a Ford dealership planned at a new auto mall, are behind anticipated schedules that were used when drafting the last budget.
Hiring of new police officers and firefighters as well as plans for new fire stations and a fire training facility, and even roadwork, will be among items reviewed if any cuts need to be made, Pettit said. He added that once new officers graduate from training he planned to maintain a 1.1 police officer ratio per 1,000 residents.
The revenue loss is due to the Legislature in its last session allowing developers to deduct the cost of system development fees from the amount of corporate sales taxes paid when a new property is sold, said assistant town manager Marc Skocypec.
The town was generating about $14 million in corporate sales taxes a year.
Because of the cut, the town will lose $750,000 to as much as $1 million in sales tax revenue each year, Skocypec said.
System development fees are charged for new construction as a way to pay for infrastructure such as fire and police services for new areas where development is occurring, as a way to let growth pay for itself.
The cut was opposed by the Arizona League of Cities and Towns, which plans to lobby against future cuts in the upcoming session.