Phoenix sales-tax increase to fund transit plan takes effect Jan. 1
Phoenix shoppers are paying more in sales tax starting Jan. 1 — money that will help the city overhaul its transportation system over the next 35 years.
Transportation 2050, the city's plan to expand its transit system and repair roads, took effect with the start of the new year. The plan envisions light-rail extensions stretching from south Phoenix to Paradise Valley Mall, and new bus routes citywide. It also aims to repave nearly 680 miles of major streets.
Voters approved a sales-tax increase to help pay for the transportation plan, passing Proposition 104 in the city's August election.
As a result, Phoenix's existing 0.4 percent tax for transportation increased to 0.7 percent, or 70 cents on a $100 purchase. The tax applies to most purchases, excluding basic groceries, and won't expire until Dec. 31, 2050. The overall sales tax, which includes county and state taxes, increased to 8.6 percent in Phoenix.
Phoenix Prop. 104 transit plan: What happens now?
The most contested aspect of the plan was the goal to triple the city's miles of light rail. Potential new routes will connect from the current line to reach destinations such as Paradise Valley Mall, south Phoenix, 79th Avenue, Grand Canyon University and Metrocenter Mall.
Proponents said light rail has drawn billions in new development to the city, along with giving low-income residents access to jobs and education.
"A great city has to have a great transportation infrastructure and this investment is going to pay dividends to the people of this city for decades to come," said Mayor Greg Stanton, one of the plan's chief advocates.
Northwest Phoenix light-rail extension to open in March
Opponents of the tax increase focused on the high cost of light rail given it moves relatively few commuters. They also raised concerns that the plan lacks accountability because the city isn't required to spend the money on specific projects and will have flexibility to decide which improvements get funded.
The sales tax is projected to generate about $16.7 billion of the plan's expected $31.5 billion overall price tag, with the remainder from a variety of sources, including federal grants and the fares paid by transit riders.
Phoenix has created a Citizens Transportation Commission to advise the city on how to spend the money. The commission's initial tasks include recommending the first streets to be repaved or have bicycle lanes added.
While some aspects of Transportation 2050 could take decades to materialize, residents can expect to see some improvements in the near future. Early upgrades will include extended hours for city buses and Dial-A-Ride, the city's paratransit service; new buses; and new bus shelters with shade.
Republic reporter Brenna Goth contributed to this article.