Maricopa’s small but growing renter population won’t be seeing any tax relief in their 2024 bills — and city leaders say that’s a good thing.

Gov. Katie Hobbs vetoed Senate Bill 1184 Thursday, saying it did not provide actual relief to renters. The bill would have prevented cities from collecting taxes from landlords of residential rental properties beginning in 2024.

“If we are going to promise relief to renters, it’s important that we are able to ensure they actually receive it,” Hobbs said in a statement.

The bill included an amendment which requested landlords reduce their tenants’ rent by the previously taxed amount, but its language did not guarantee this. Hobbs also noted legislative attorneys believed this provision could have faced legal challenges for being unconstitutional.

The veto prompted a sigh of relief from city leaders around the state, including in Maricopa.

“I want to thank the governor,” said Maricopa Mayor Nancy Smith. “This bill would not have helped those it was intended to help.”

Arizona does not charge a rent tax, but some cities like Maricopa do. The Arizona League of Cities estimated this could have resulted in municipalities collectively losing over $200 million from their budgets.

Maricopa currently charges a 2% rent tax, an amount that generated approximately $739,000 toward the city’s operating expenses and improvement projects in 2022. A reduction in this could have impacted key areas in city services, such as department payroll and infrastructure upgrades.

Smith believed decision-making powers on city budgets should remain in the hands of local governments.

“State legislators should leave those decisions to local elected officials,” Smith said.

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