Brewer's veto likely kills Q.C. tax hike

A sales tax increase Queen Creek's Town Council approved just in case a state budget provision passed appears to be history.

A moratorium on collecting development impact fees, which town officials worried would cut $4.6 million out of its budget, wasn't in the state budget the Legislature passed early Wednesday morning. That meant a fee increase and tax hike the town council passed in case Queen Creek needed to make up that money likely won't go into effect, since the two measures were contingent on the moratorium being signed into law.

Q.C. OKs hike in sales, construction taxes

Despite veto threat, lawmakers OK new budget

Q.C. sales tax hike depends on Legislature

The impact fee freeze was also in one of the budget bills Gov. Jan Brewer vetoed Wednesday, according to a bulletin from the Arizona League of Cities and Towns. Brewer called a special session beginning Monday to deal with the budget.

The governor's agenda for the special session is very narrow, only allowing discussion about balancing the budget and temporary taxes, said Ken Strobeck, the league's executive director.

"We don't believe that impact fees can be discussed in the special session," Strobeck said.

The potential for a moratorium on impact fees, which developers pay to help build sewer and water lines and streets that accommodate growth, had Queen Creek officials worried they'd have to cut nearly a quarter of their General Fund to make up the difference.

Because there were also indications a moratorium on increasing sales and development taxes would be in the state budget, the town passed some measures before July 1 in case it would have to find a way to make up the $4.6 million.

Queen Creek's Town Council unanimously approved increases in sales and construction taxes Tuesday.

"It's a sad situation when towns are forced to take this option because our legislators are sitting on their thumbs," Councilman Gail Barney shortly before the Tuesday vote.

The council approved making the sales tax rate 2.5 percent in all parts of town. Shoppers had paid a 2.5 percent rate at stores in the Queen Creek Marketplace and Cornerstone developments, but 2.25 percent everywhere else.

The council also approved raising construction taxes by 1 percent, to 5.25 percent. That would bring in another $1 million, Flynn said.

The tax hikes were a secondary backup to raising money. It only would have gone into effect if a moratorium were passed and another measure the council passed earlier, which would add service fees to building permits, were struck down. Flynn said the town wasn't sure whether the town would be brought into court for that measure.