By Jim Derouin
In light of the challenges faced by everyone because of Covid-19, and the fact that our way of life in Scottsdale is heavily supported by tourists who are going to stay away until the health crisis is over, this seems like the right time to consider what is good about the city.
Scottsdale is a special place and we are fortunate to live here. To keep our property values and amenities high and our property taxes low, we need to generate economic activity from a variety of sources that produce sales tax revenue.
Basically 25% of Scottsdale’s area (about 47 square miles) is open space that is being purchased at the cost of $1 billion. Yet, it is not a “bedroom” community from which residents flee during the day and return at night. Data shows that Scottsdale is a self-sufficient, economically strong city. Rather than being a retirement community, it is an employment hub, which is important to supporting our lifestyle.
Each day, 150,000 workers enter Scottsdale to work while half that number (Scottsdale residents) leave to work elsewhere in the Valley. In addition, 30,000 Scottsdale citizens live and work in the city. As a rule of thumb, those who work here, spend here – at some of the 18,000 businesses that operate in Scottsdale or at its 825 restaurants.
Health care, finance, insurance and technology firms dominate the list of Scottsdale’s largest employers. Tourism, automobile dealerships, retail operations (large and small), entertainment (including restaurants) and construction all add economic activity vital to supporting Scottsdale’s amenities while keeping property taxes low.
We host more than 4.5 million visitors annually at our hotels and resorts. In 2018, 1.7 million were from outside the United States. Scottsdale’s reputation as a diverse, welcoming community is critical to its success.
In addition to the McDowell Sonoran Preserve, Scottsdale has 42 parks; 70 athletic fields; 37 playgrounds; 53 tennis courts and two tennis centers; 39 basketball courts; seven museums; and four aquatic centers.
Scottsdale is also an education center with 38 public schools (more than 25,000 students) and the Arizona State University Innovation Center at SkySong. Scottsdale Community College is immediately adjacent on the Salt River Pima-Maricopa Indian Community.
Scottsdale has a projected build-out population of 285,000 residents; this is 200,000 less than originally planned because of the purchase of the McDowell Sonoran Preserve. Scottsdale’s explosive population growth occurred between 1980 and 2000 when the city increased from 88,000 to about 255,000 residents. Scottsdale is close to residential build-out in that there are less than 15,000 acres left for residential development out of a total of 118,000 acres in the city.
Most residents judge their community by a variety of characteristics. What physical amenities does it provide? How do property taxes compare with those in other communities? How do property values compare? Scottsdale scores well in all of these categories.
Scottsdale’s amenities are itemized above; they are unparalleled in any comparable community in the Valley. In addition, Scottsdale has the highest median housing price of any large Valley city (Phoenix, Mesa, Chandler, Glendale, Gilbert, Tempe and Peoria). Because 70% of Scottsdale’s budget was projected for fiscal year 2019-20 to come from state and local sales taxes and from state income taxes, only 10% of the entire city budget was projected to come from property taxes.
Another way to think about it is that, of our total residential property tax bill, only five cents of each dollar of property taxes goes for the city budget. In terms of total property taxes used to fund city budgets (primary tax rate) and to pay off bonded indebtedness (secondary tax rate), Scottsdale’s primary and secondary combined tax rate is less than Tempe, Phoenix, Mesa, Glendale and Chandler. It is essentially the same as that for Gilbert.
Innovative thinking, solid leadership and collaborative actions has stabilized the city over the last few months. Continued focus on how to sustain and grow our economic viability is critical to keep our city special.
Jim Derouin is a long-time Scottsdale resident, attorney and member of the city of Scottsdale’s Districting and Charter review task forces.