City Available Resources

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The City of Mesa receives revenue from many different sources. The three main sources are taxes, intergovernmental revenues and utility rate revenues. Some of the resources or portions of resources are restrictive in nature. This means that the revenue can only be applied to certain types of expenditures. Other resources or portions of resources are not restrictive in nature. This means that the revenues are available for general operations. Some revenue sources are relatively stable over time while others fluctuate more with the economy. Therefore, the City strives for a diversity of revenue sources in order to ensure the continuation of City services during economic cycles. All the available resources are shown in the pie below. Use the drop down arrow to learn more about each section of the pie.

Total City Available Resources Pie Chart

Taxes

Arizona’s cities and towns, under state law, have the authority to establish certain taxes for revenue purposes.

The local transaction privilege tax, also known as a sales tax, is one means for financing municipal services. These funds come from sales tax revenues collected from purchases made within the City of Mesa and from use tax on certain goods and services where sales tax has not been collected. The City of Mesa's local sales tax rate is 1.75%. When combined with the State and County sales tax rates, the total sales tax rate is 8.05%.

Sales Tax

More information about the City's tax revenue, including visualization tools and data sets describing citywide tax revenue by varying time periods, can be found on the City's open data portal. A comparison of sales tax rates in other local municipalities can be found here

There are two types of property tax in the State of Arizona, primary and secondary. City of Mesa only has a secondary property tax for the purpose of paying principal and interest due plus a reasonable delinquent factor for debt associated with General Obligation Bonds. These funds come from a levy on the assessed value of property owned within the City of Mesa. A comparison of property tax rates in other local municipalities can be found here.

  • Transient Occupancy Tax

Also known as, bed tax, the transient occupancy tax is assessed on hotel/motel stays at a rate of 5.0%.  This tax is dedicated to the Visit Mesa program, capital improvements at the convention center, spring training facilities, and the payment of excise bond debt related to the spring training related construction project to build a new stadium and practice fields for the use of the Chicago Cubs.  Transient Occupancy Tax is a restricted revenue source. 

Intergovernmental Revenues

 

Intergovernmental revenues are normally received from other government agencies however; grants may be received from private organizations as well.

  • State Shared Revenues
    State shared revenues are received from the State of Arizona. In Arizona, the state shares income tax (urban revenue sharing), transaction privilege tax (state shared sales tax), state gasoline tax (Highway User Revenue Fund - HURF), vehicle license tax (VLT), and state lottery funds (Local Transportation Assistance Fund - LTAF) with incorporated cities and towns, and counties. HURF revenues are restricted to transportation expenditures and LTAF revenues are restricted to transit expenditures. The remaining state shared revenues are not restricted in use.

 

 State Shared Revenues

 

  • Grants
    The top three departments that receive grant funding are Police, Fire and Medical and Housing. All three areas depend on annual grant resources to fund part of their daily operations. Grant funding must be applied for each year unless a multi-year grant is specified. Grant funding is restricted to the use designated in each grant and has additional reporting requirements. The City determines if the value of the grant is worth the additional requirements and staff time before accepting grants.

Sales and Charges

Sales and charges revenues are received from customers in the exchange for services. Over 90% of the revenues in this category are attributable to the various City enterprises. Enterprises are business-like service areas that are tracked individually in order to determine net income. Utility revenues make up the bulk of the enterprise resources. The City provides Water and Wastewater services to all residential and commercial customers, solid waste services to all residential customers and some of the commercial customers, natural gas to a portion of the City for both residential and commercial as well as a large service area outside of the City limits, electric services to the downtown area and district cooling to a portion of the downtown area. Utility revenues are determined through the Utility Rates as identified in the Utility Rate Book [PDF].

The remaining sales and charges are for entrance to venues like the Arizona Natural History Museum and the i.d.e.a. Museum, entrance to events at the Mesa Art Center and the Mesa Amphitheater, room reservations at the Mesa convention Center, and classes offered through various departments at various locations around Mesa. The Schedule of Fees and Charges sets the price range for any particular activity or service provided by the City of Mesa.

 

Self-Insurance

Self- insurance revenues come from internal sources like department and City contributions and in the case of employee benefits, from City employees and retirees. The City operates three self-insurance areas: Employee Benefit Trust Fund, Worker's Compensation Fund, and Property and Public Liability Fund. These are discussed in detail on the Major Funds page under Trust Funds.

 

Other Revenues

Other revenues include revenues from various fines, licenses and one-time revenues such as land sales.

 

Bonds

Municipal bonds are a financing tool used by the City for capital improvement projects. Bonds proceeds are resources available for use on annual expenditures. However, the issuance of bonds results in a liability for the City. The City must pay back the bondholders with interest over the term of the loan.

 

Funds Carried Forward

 

If resources are greater in a given year than expenditures, the result is an increase in available resources. This can be due to many things: timing of expenditures, lead-time of an acquisition, overall savings or resource amounts greater than projected. The City can also set aside funds over multiple years in order to pay for large projects or items. The amount of funds carried forward from one year to the next is not predicted. These funds have already been received by the City. Some of the funds are allocated to items that are already contracted. Some of the funds remain unallocated and are available for expenses in the upcoming fiscal year. Funds carried forward are sometimes referred to as reserves or fund balance.