Construction kick-starts Surprise tax-revenue rise

The Arizona Republic |
August 29, 2012
By Lesley Wright

After hitting a low in 2010, sales-tax revenue has steadily increased in Surprise for the past two years, with construction making an unexpected comeback.

“Construction is looking even better than we thought it would,” said Cathy Gleason, Surprise’s interim chief financial officer. “This year will be better than last year, and it’s coming back stronger this year.”

Revenue from sales taxes is a key driver for the city’s annual budget. It makes up nearly 36 percent of the city’s operating budget, which pays for police, fire, parks and other services. The revenue also illustrates how well the city attracts businesses, restaurants, tourists and new residents.

…The next few years’ construction numbers tell the story of the housing bust: In 2008, construction taxes dipped to $15.5 million and kept dropping. The low point was 2011, when Surprise collected just $3.8 million in construction-related taxes.

Some Surprise housing developments have quickly resumed building. Builders in the distinctive Marley Park community, for example, were back constructing houses in 2010 after stalling in 2008…

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