By Matthew Holloway |
In a 5-4 party-line vote Tuesday, the Republican-led Arizona House Ways and Means Committee advanced legislation that would temporarily freeze most municipal and county tax, fee, and utility rate increases for four years.
House Bill 4030 and House Concurrent Resolution 2052, sponsored by Committee Chair Justin Olson (R-LD10), would limit local government charges to levels approved in fiscal year 2025–2026 budgets for a four-year period beginning July 1, 2026, and ending June 30, 2030.
Under the proposal, cities and counties would be prohibited from raising existing fees or tax rates, creating new tax classifications, or expanding tax bases during the moratorium period. The measures would preserve voters’ authority to approve increases at the ballot box. HB 4030 would enact the moratorium through statute. HCR 2052 would refer the policy to voters at the next general election.
The legislation includes enforcement provisions aimed at preventing local governments from restructuring or renaming charges, altering rate schedules, or modifying classifications in a way that would effectively increase revenues beyond fiscal year 2025–2026 levels.
In a statement, Olson said the measures are intended to provide cost certainty for residents amid ongoing inflationary pressures.
“These bills do exactly what families expect when the cost of living keeps climbing: they stop government from reaching deeper into their pockets,” Olson said. “While Arizona families are cutting back, local governments should not be hiking fees, raising taxes, or quietly inflating utility bills. HB 4030 and HCR 2052 put a hard check on that behavior and give taxpayers certainty and relief.”
“This comes down to discipline and fairness,” Olson explained. “Local governments already approved their budgets. This bill just requires them to live within the revenues generated by existing tax rates. If a city or county wants more money, they can make their case to voters and earn the support of a strong supermajority. What they cannot do is quietly raise costs on families whose budgets are already stretched thin.”
The proposal also follows recent disputes between state lawmakers and municipal governments over local authority, including 2025 legislation involving Axon’s planned headquarters development in Scottsdale that resulted in the Legislature preempting certain local actions.
Arizona’s Constitution grants charter cities broad authority over local affairs, including taxation and fee structures, under its home-rule provisions (Arizona Constitution, Article XIII, Section 2). Arizona courts have historically recognized broad municipal autonomy in matters deemed “purely local,” as the Arizona Supreme Court noted in State ex rel. Brnovich v. City of Tucson (2017).
In recent years, several Arizona municipalities have approved utility and service rate increases, citing infrastructure needs and inflationary pressures. For example, the City of Phoenix approved water and wastewater rate adjustments in 2023 and 2024 to address infrastructure and operational costs, according to the City of Phoenix Water Services Department. Tucson Water has also adopted phased rate increases in recent budget cycles, per city rate information.
If approved by both chambers and signed by the governor, HB 4030 would take effect as statute. As a concurrent resolution, HCR 2052 would bypass the governor and instead be placed on the ballot for voter consideration. Both measures now advance to the full House.
Supporters argue the measure would provide temporary cost certainty for residents, while opponents of similar proposals in past sessions have raised concerns about potential constraints on municipal budgeting and infrastructure funding.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
