ARIZONA DAILY STAR: Fri., Oct. 26, 2007
Towns struggle to provide services as building stalls
By Erica Meltzer
Sales tax not the remedy, towns say: impact fees, property taxes could be
Rapid growth over the last five years filled the wallets of home builders and speculators and made even average homeowners in Pima County feel a little flush. It also swelled the coffers of local governments, especially in the Tucson area's suburban towns of Marana, Oro Valley and Sahuarita.
An Arizona Daily Star analysis of local government finances found that in recent years the towns collected 10 to 38% of the revenue they rely on to pay for roads, parks and police from development permit fees, construction sales tax and impact fees.
But growth has stalled as building permits dropped precipitously over the past year, taking with them important sources of revenue. At the same time, local governments face mounting infrastructure needs — everything from parks to sewers — to serve the residents added during the housing boom.
Growth kept property tax down
Growth still plays a role in county finances — county officials did the analysis because they are concerned about the decline in the housing market. They also found the rate of increase in housing values correlated directly with the number of building permits issued.
FULL STORY: http://www.azstarnet.com/allheadlines/208245