The town council in Gilbert, Arizona, violated the state constitution by approving tax increases on services to fund infrastructure projects, according to a lawsuit filed by the Goldwater Institute.
The case, filed late last month in Maricopa County Superior Court against Gilbert officials, follows litigation the conservative organization brought in September challenging the Arizona town of
A Gilbert resident and the Home Builders Association of Central Arizona are plaintiffs in the latest lawsuit, which challenges the town council's Oct. 22 approval of higher sales, use, and lodging tax rates effective Jan. 1 to generate about $55 million annually.
"The Arizona Constitution prohibits 'any county, city, town, municipal corporation, or other political subdivision of the state, or any district created by law' from imposing or increasing any transaction-based tax on the 'privilege to engage in, or the gross receipts of sales or gross income derived from, any service performed in this state,'" according to the lawsuit.
Gilbert officials did not immediately respond to a request for comment.
In October, the town said additional money was needed to address "
"Gilbert intends to cash fund as much of the critical infrastructure projects as possible to reduce costs and maximize the value to taxpayers," an Oct. 23 statement from the town said.
The town of more than 280,000 residents had nearly
The Goldwater Institute's Payson lawsuit, which challenged the constitutionality of the town's fast-tracking debt issuance "under the pretext of an emergency," was declared moot by a Gila County Superior Court judge in October. While the institute appealed the ruling, Payson officials subsequently cancelled the bond sale, citing the ongoing litigation and opposition to the debt from incoming council members.
In a statement last week, the institute said it "will continue to hold local governments accountable to the public they serve and ensure
