TEMPE, Ariz. — Tempe voters could soon decide whether to approve a new sales tax increase aimed at funding public safety, transportation improvements and preschool education programs across the city.
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The Tempe City Council is expected to vote Thursday night on whether to place a 0.5% sales tax increase on the November ballot.
If approved by voters, city leaders say the increase would generate about $50 million annually and help offset millions of dollars in lost revenue tied to state funding changes, including the elimination of Arizona’s residential rental tax.
Under the proposal, the tax increase would be broken down into three parts:
- 0.3% for public safety
- 0.1% for transportation
- 0.1% for preschool education
City officials say the increase would add about 50 cents for every $100 spent in Tempe. Groceries and home-prepared food items would be exempt from the tax.
Tempe leaders say the additional funding could help hire more police officers, firefighters and paramedics, improve emergency response times, expand transportation infrastructure and increase access to the city’s Tempe “PRE preschool program.”
Without additional revenue, city leaders warn Tempe could face cuts to public safety staffing, transportation services and community programs.
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According to the city, Tempe currently serves about 475,000 people daily through residents, workers and students, along with millions of annual visitors. Officials say a sales tax increase would allow some of the cost burden to be shared by visitors instead of relying solely on residents.
Tempe voters last approved a major voter-approved city sales tax increase in 1996, when a half-cent transportation tax was passed to help fund transit projects including light rail support, bus service, bike infrastructure and, eventually, the Tempe Streetcar.
Neighboring cities, including Phoenix and Gilbert, also approved sales tax increases in 2025 following state funding changes tied to the elimination of the residential rental tax.
What makes Tempe’s proposal different is its focus on preschool education. City officials say the measure would make Tempe the first city in Arizona to dedicate a portion of city sales tax revenue specifically to preschool education programs.
If the City Council approves the measure during the May 14 meeting, Tempe voters would have the final say in November.
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You can watch the meeting live here. It starts at 6 p.m.