Phoenix Mayor Phil Gordon said last week that a temporary increase in the city’s sales tax could prevent additional cuts in municipal services that have already been pared down significantly.
Gordon told the City Council that “an emergency economic surcharge” to four existing sales taxes — including two dedicated to public safety — could help cope with declining tax revenues.
The surcharges would be removed when conditions improve, according to the mayor.
“It may take that to get us through the economic crisis,” Gordon said.
The City Council has already cut $270 million from the general fund budget, and councilors may have to reduce spending by another $95 million due to dropping revenues.
In addition, Gordon said, the Legislature may reduce the $378 million of shared state-city revenue the city expects in 2010 as the states deals with its own revenue shortfall.
Phoenix currently levies sales taxes totaling 2%.
In a letter to councilors, the mayor’s deputy chief of staff, Bill Scheel, said Gordon wants to begin a public dialogue but is not ready to support specific proposals.
“He is making the point that in this economic emergency, the public needs to know that the only alternative to drastic cuts to basic city services is increased revenue,” Scheel said.