As the City of Scottsdale stands poised to enact a staggering $2.2 billion budget, city leaders must now contend with a new lawsuit from the Goldwater Institute challenging the city’s controversial sales tax increase.
As of the council’s June 10th meeting, the city has reportedly agreed to spend up to $90,000 in taxpayer dollars on the outside law firm Osborne Maledon to defend it.
In June 2024, the Goldwater Institute challenged the newly approved 0.15% sales tax, which was pitched to voters as a “replacement tax,” for an unrelated, expired 0.2% Land Acquisition Tax.
Goldwater won that legal battle, “forcing the city to admit that it was raising, rather than lowering taxes,” according to a press release.
Under the Arizona Constitution, such a tax hike must be approved by at least 60 percent of voters, a threshold the city did not meet in the 2024 election. Scottsdale leaders, however, have enacted the tax.
MORE THAN A BILLION DOLLARS? Listen for yourself… 👇
— Goldwater Institute (@GoldwaterInst) June 5, 2025
On Friday, June 3rd, the Goldwater Institute filed a lawsuit against the city, panning the tax as “unconstitutional.” It stated that, “Supermajority rules help protect minority voices, prevent special-interest-driven decisions, and force governments to clean up their budgets before reaching for more of your money. Just like any responsible household, city, county, and state officials should look at how they’re spending first—not just always demand more, regardless of what the law and economic commonsense demand.”
Scott Day Freeman, writing for Goldwater added, “Scottsdale is ignoring the state’s constitutional mandate—requiring us to go to court yet again.”
City Attorney Sherry Scott’s summary to the city council stated, “The budget implications of not defending this case are $25 million per year for the next 30 years.” The law firm, earning approximately $912 per hour at the taxpayer’s expense, is fighting the Goldwater Institute’s efforts to seek an injunction that would stop the tax from taking effect on July 1st, along with a declaratory judgment that the tax is unenforceable.
Freeman said, “Our clients seek only a declaration that the tax is unlawful and an injunction to stop it being enforced. Our clients do not seek a refund or damages.”
Scottsdale spokesman Kelly Corsette stated, “The city is confident its ballot item and election result comply with the Arizona Constitution and all applicable election laws.” He claimed that “the 60% tax approval threshold does not apply to local ballot measures: it is in a section of the constitution that regulates statewide initiatives and referendums, not in the separate section of the constitution applicable to city initiatives and referendums.”
In its press release, the Goldwater Institute maintained that, “In 2022, Arizonans strengthened those protections by amending the Constitution to require any tax passed through a citizen initiative or referendum receive at least 60 percent approval to become law—a requirement that applies not just to statewide, but also to local ballot initiatives.”
The inventor and top distributor of the Taser, Axon Enterprise, says it will no longer be working with the Scottsdale City Council on their new headquarters.
That’s not to say Axon will leave Scottsdale or the state. Axon leaders clarified the company only intended to keep city leaders out of discussions to establish their new headquarters going forward.
Axon President Josh Isner announced on Monday the company withdrew from negotiations with city leaders on building their new headquarters. Isner blamed the “toxic” political climate of Scottsdale City Council.
“Unfortunately, Axon is withdrawing from negotiations with the City of Scottsdale,” said Isner. “The internal politics of the City Council currently make it impossible to reach an agreement. I have never seen such a toxic environment in my life. We put a great deal on the table and we tried our best.”
Scottsdale City Councilman Adam Kwasman said he was disappointed in his fellow council members for refusing Axon’s negotiations. Kwasman said he would work on another solution to keep Axon from leaving.
“[Axon’s] offers were generous and would have benefitted both Scottsdale and Arizona as a whole,” said Kwasman. “I am saddened that my colleagues could not share in a vision that would have reduced approved density, reduced approved apartments, funded police, and built an incredible partnership between the city and one of America’s best companies.”
I want to make it clear to everyone following @axon_us and Scottsdale: @JoshIsner’s negotiations with the mayor and me were in good faith. Their offers were generous and would have benefitted both Scottsdale and Arizona as a whole. I now consider Josh a friend. I am saddened that…
Isner thanked Kwasman and Scottsdale Mayor Lisa Borowsky for their efforts to keep negotiations afloat.
“You came to the table in a solution-oriented and thoughtful way,” said Isner. “It was a pleasure working with you on this and appreciate your continued support of Axon.”
Borowsky, in turn, thanked Axon for their willingness to negotiate and expressed disappointment at the impasse between the company and the council.
“Unfortunately, there were too many hurdles to overcome in order to move an agreement forward successfully,” said Borowksy. “I remain hopeful that future negotiations result in a win-win agreement that works for the community and keeps this vital employer right where it belongs – in Scottsdale.”
“I appreciate Axon’s efforts to come to the table and engage in meaningful dialogue regarding the future of their development. Their team was willing to make concessions to their existing plan, which I appreciate.
Unfortunately, there were too many hurdles to overcome in order…
Not all leaders representing the area were pleased with Axon’s actions up to this point.
State Rep. Joseph Chaplik accused Axon of navigating the dealmaking process dishonestly. Chaplik told Axon to make good on their threat of leaving the state by disclosing where they planned to move their operations.
“They have divided the Republican caucus and they are now dividing the city council. They do not listen to the people of Scottsdale, who I represent. They have bypassed all proper channels to resolve their land use issues,” said Chaplik. “Their tactics included bullying, threatening and securing close door meetings. This is not how a transparent company operates.”
Axon has not been operating in good faith since they bought the land in #Scottsdale.
They have divided the Republican caucus and they are now dividing the city council.
They do not listen to the people of Scottsdale, who I represent. They have bypassed all proper channels to…
— Rep. Joseph Chaplik 🇺🇸 (@JosephChaplik) June 9, 2025
Although these recent negotiations didn’t go Axon’s way, the company did see wins in other areas recently. Governor Hobbs signed a bill retroactively preventing zoning decisions from becoming ballot questions. The new law nullifies a referendum effort by 27,000 Scottsdale residents challenging Axon’s planned headquarters — under that referendum, voters would have decided on the proposed headquarter’s fate in 2026.
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Despite opposition from local leaders and community organizers, Governor Katie Hobbs has signed SB 1543 into law, a move that will significantly curtail the ability of residents in cities like Scottsdale to refer zoning decisions to the ballot. The legislation, which passed the Arizona Legislature along party lines earlier this month, takes aim at local control.
The law applies retroactively, nullifying a referendum effort by nearly 27,000 Scottsdale residents who had petitioned to challenge a city council-approved expansion plan by public safety technology company Axon. The referendum would have placed the matter on a future citywide ballot, giving voters the opportunity to weigh in on the project’s future.
In a letter sent to Governor Hobbs prior to her decision, Scottsdale Mayor Lisa Borowsky and the full City Council warned that SB 1543 “undermines the principles of local control that are foundational to Scottsdale’s governance” and “sets a dangerous precedent.” The city emphasized that the referendum effort was not a protest against development, but rather a call for public input on a high-impact zoning change.
The controversy began after the Scottsdale City Council voted in November 2024 to approve Axon’s expanded development plans. While the company’s previously approved headquarters from 2020 remains intact, the new proposal includes nearly 2,000 multifamily residential units; over 400 hotel rooms; and approximately 47,000 square feet of retail and restaurant space.
Many residents argued that the expansion warranted broader community input, prompting a grassroots petition drive that garnered tens of thousands of signatures. However, with SB 1543 now law, the referendum effort has been invalidated, and Scottsdale voters will not have the opportunity to decide on the matter at the ballot box.
SB 1543 removes the ability of residents in cities of certain sizes—including Scottsdale—to challenge zoning decisions. Supporters, including Republican legislative leaders, say the law clears the way for large-scale development projects and reduces delays caused by ballot initiatives. Critics, however, argue it silences community voices and weakens the checks and balances that local governments rely on.
City leaders have expressed concern that the legislation fails to address critical issues related to growth, including increased traffic and infrastructure strain. “These are not abstract issues—they impact the daily lives of our residents,” the city wrote in its plea to the Governor.
With the law now enacted, Scottsdale is weighing legal and procedural responses to preserve local authority, while other municipalities watch closely to see how the law will be implemented and challenged.
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
“Drain the swamp” is fun to say, and it makes for a great slogan for an election campaign. But too often, that’s where it stops. How many times have you heard politician after politician use such a phrase only to be elected and leave the swamp intact—or make it murkier? But now, it’s 2025. President Trump is back in office, and he is setting a standard of excellence when it comes to draining the swamp—especially on some key issues. And Scottsdale’s newly elected city council is following his lead.
President Trump unleashed a torrent of Executive Orders that have unleashed fossil fuel production in America, rolled back the Green New Deal climate cult fantasy, ended DEI and other race-based hiring and employment practices, and is taking a sledgehammer to the administrative state by letting Elon Musk identify and eliminate billions in wasteful spending.
As we have watched the Trump team move at warp speed to deliver on their campaign promises, we were curious to see if any other state or local governments would follow Trump’s lead at plowing ahead with DOGE-style meaningful reform. Here in Arizona one city has: Scottsdale…
On Tuesday, the Scottsdale City Council voted 5-2 to ensure that merit-based hiring, evaluation, and promotion replaces “unlawful and anti-meritocratic forms of discrimination,” and that the use of city funds for diversity, equity, and inclusion (DEI) cease.
Despite the protests of 45 activists, along with current and former city employees, the vote carried with the newly elected council members and mayor acting on the mandate voters gave them in November.
The council also voted 5-2 to enact an ordinance requiring all city employees to return to in-person work. In both votes, Councilwomen Maryann McAllen and Solange Whitehead dissented. Mayor Lisa Borowsky voted with the majority. According to the text of the City Council Meeting Agenda, the new Ordinance No. 4662 will:
“1. Ensure city employees are hired, evaluated, and promoted based on merit, protecting City of Scottsdale employees from unlawful and anti-meritocratic forms of discrimination, and ensuring that residents and taxpayers are served by the most qualified city employees.
2. Discontinue the use of city funds for Diversity, Equity, and Inclusion (DEI) systemic programming, to include the Office of DEI, DEI programming and trainings, and other initiatives that could arguably violate A.R.S. § 41-1494. Training and prevention of unlawful discrimination remains encouraged and shall continue.
3. Direct the City Manager, or designee, to reassign the Diversity Program Director and ADA/Title VI Compliance Coordinator to an appropriate department and position; reflect these changes in the city’s organizational chart; and make the necessary budget transfers and amendments necessary to carry out the intent of this Ordinance.”
Councilman Adam Kwasman, a supporter of the ordinances, stated that equity needs to be removed from government because “it infers that equal justice under the law cannot exist. … It imposes a racial hierarchy predicated upon a narrative of past injury at the cost of equality.” Kwasman has been a prominent voice decrying the public being “bombarded with DEI” by the city.
You can’t walk into Scottsdale City Hall without being bombarded with DEI. This poison will be rooted-out of our beautiful city. No matter one’s race, orientation or creed, we value content of character. pic.twitter.com/dho2n4OU7a
Two members of the council attempted to forestall the vote by calling for a work study to be completed, examining the city’s DEI practices. However, this attempt was voted down.
Kwasman addressed the City Council and the activists in attendance by pointing out that the city’s compliance with the Americans with Disabilities Act would not be affected nor would the city’s stance on anti-discrimination practices,
“Tonight, there is a purposeful conflation between intentions of those who do not believe in certain government programs and those who have a heart that’s aimed true and caring toward a diverse crowd. Toward somebody, toward a diverse community, to belief in equity, to a belief in inclusion because the definitions of diversity, equity, and inclusion are wonderful. They’re wonderful. Nobody questions it. Diversity brings together people from different backgrounds and different viewpoints. It enhances decision-making. It prevents group think.
“Equity is a centuries-old concept of law. It boils down to treating people fairly. And who could object to making people feel welcome where they live and work? You’re doing a good job. The problem, the problem is where the rubber meets the road. The problem is that DEI, as practiced here and elsewhere, it runs policies through the lens of race and sex and other identity categories. It actively prevents… it actively prevents diversity of viewpoint. It subverts equal opportunity in favor of an artificial equality of outcome. It excludes those believe whose beliefs diverge from a narrow orthodoxy.
“Companies, as of today, that have moved away from DEI include the following, as of today: Disney, GE, PayPal, Comcast, Amazon, Bloomberg, McDonald’s, Walmart, Lowe’s, Ford, Jack Daniels, which I think we all need one after tonight, Harley-Davidson, and John Deere.
“Scottsdale must be a city where all are welcome…to build a future and a flourishing future for themselves and their families, a place where everyone is treated equally and fairly under the law. This ordinance does not get rid of our ADA compliance, nor does it get rid of our anti-discrimination ordinance. And I stand with the Mayor when she stated that if there is ever an instance of discrimination in this city, I will stand shoulder to shoulder along with everybody on this dais to fight discrimination.”
WATCH THE MEETING:
The ordinance will directly impact two city roles: the city ADA coordinator, whose office would be relocated, and the Diversity Director, who may be reassigned.
