Phoenix Officials Fear Tax-Funding Cuts

Phoenix officials are concerned the city will lose some of its state-shared tax funds beginning next year, according to news reports. At issue is a clause in a deal signed a decade ago, when the state agreed to pay half of the $600 million needed to expand the Phoenix Convention Center. That clause allows the state to withhold sales-tax revenue from the city if the center's projections of the number of events and related attendee spending falls short. According to the agreement, an economic impact study on the project is to be conducted next year, five years after the expansion opened. However, citing the bad economy and resulting years of reduced business travel, and the boycotts of the state that were spurred by Arizona's 2010 immigration enforcement law, the Greater Phoenix Convention & Visitors Bureau lobbied the state legislature earlier this year to shelve the study. A state budget bill initially included an amendment to remove the study and revenue-withholding provisions; the amendment was taken out in the final days of the session. At stake is $20 million to $30 million in tax dollars that the city uses annually to help pay for municipal services. More political wrangling is expected over the issue. Phoenix Councilman Bill Gates told the Arizona Republic that he supports oversight from the state as long as the impending economic impact study takes into account the difficulties Phoenix's sales team has faced. "I understand the desire of the state to have accountability," Gates said. "Hold us accountable, but be fair about it." Steve Moore, president and CEO of the CVB, told M&C, "No matter what, they're not going to take away funding completely." He added that the CVB is not going to fight the 2014 impact study, but will ask that the researchers be mindful of the recession, the boycott and the time period. "We would never have gotten the 2015 Super Bowl without the expansion and the upgrades to downtown that have followed," said Moore. "We think at the end of the day, the economic impact study will reestablish the importance of having the convention center project completed."