Graduate students recommend paths to increase municipal revenue

Today, many municipalities across the United States, are struggling financially due to diminished state sales tax revenue hastened by the ease of online shopping. Municipalities throughout Arizona are particularly challenged while attempting to keep retirement funds manageable.

Since its incorporation in 1978, Apache Junction has taken “a conservative pay-as-you-go approach to funding its operating budget and capital projects,” (PC Spring 2018 Guide) from not imposing a property tax to the maintaining of a low level of bonded debt. Due to a decrease in sales tax revenue, Apache Junction wants to generate ideas that would help the city thrive and maintain its General Fund.

A member of the EPIC-Network, Arizona State University’s (ASU) Project Cities “connects higher education with local communities” (from ASU Project Cities site) to implement theoretical and research-backed solutions to local problems. Apache Junction invited ASU’s Public Affairs graduate students to review city finances so they could illustrate creative and diverse ways for municipal revenue to be increased.

ASU graduate students approached Apache Junction’s municipal revenue issue from many different angles. They reviewed the city’s budget, income sources, expenditures, and demographics and  compared collected data to peer cities using literature review, situational analysis, and benchmarking. By utilizing in-depth, data-centric comparisons, graduate students identified revenue sources and modifications not previously considered or implemented by Apache Junction.

Based on research conducted and comparative data evaluation, the students recommend testable ideas for Apache Junction, which included: 

• Introducing higher fees for non-residents and commercial businesses
• Expanding local economic opportunities in community-appropriate ways, such as 
  • Creating a boutique retail sector; 
  • Restructuring recreation fees and service charges, while considering low-income individuals to ensure they are not impacted; 
• Considering the addition of a primary or secondary property tax to pay off bonded debts.

The ideas and recommendations presented by the ASU graduate students identified opportunities meant to support the city by increasing municipal revenue. These plans are excellent starting points to be implemented by Apache Junction, sure to induce revenue growth once fine-tuned for city demographics and community needs.

Arizona State University Project Cities Contact
Steven Russell
Program Manager
steven.russell@asu.edu
480-727-2698

Malcolm Goggin
Public Affairs
Course Title: Public Affairs Capstone, 509

Apache Junction
Larry Kirch
Director
Development Services
City of Apache Junction
lkirch@ajcity.net
480-474-5082

Read the full story of the partnership.

Read the final student report delivered to the local gov/community partner.