State-shared revenue

$2,932,441 a year arrives from the state.

Of that, $1,166,972 is Urban Revenue Sharing — the only stream tied to Arizona's income tax, and so the only one a change to that tax would move.

$1,166,972

Urban Revenue Sharing, FY 2024-25

5,486

population used to apportion it

74%

of the URS pool comes from individual income tax

The four streams, and what each one actually depends on

Urban Revenue Sharing

State income tax

$1,166,972

State sales tax (TPT)

Statewide retail activity

$829,058

Highway User Revenue Fund

Fuel tax and vehicle fees

$545,451

Vehicle licence tax

Vehicle registrations in county

$390,960

League of Arizona Cities and Towns, State Shared Revenue — FY 2024-25 Final Budget Estimates, 2024-05-30. Control totals from ADOT (VLT, HURF) and ADOR (TPT, URS). Figures are FY 2024-25.

Urban Revenue Sharing is fixed by statute, not by negotiation. Cities receive 18% of the state's net individual and corporate income tax collections from two fiscal years earlier, apportioned by population with a 1,500-person floor. The town does not set it and cannot vote to change it.

That two-year lag is the part worth planning around. A change to collections does not reach this budget until two years later, which is both the warning and the cushion.

Urban Revenue Sharing under current law (grey) against individual income tax eliminated (copper). Shaded years rest on an assumed growth rate rather than a published forecast.

What each scenario would cost, at full effect, in today's dollars

No change

Current law. The income tax base grows at JLBC's published forecast, then at a conservative assumed rate beyond it.

no change

Individual income tax cut 25%

A 25% reduction in individual income tax collections, effective in one year, with no offsetting change to the corporate base or to the 18% statutory share.

−$201,736

Individual income tax cut 50%

A 50% reduction phased over two years. Phase-in is modelled linearly, which is a simplification.

−$403,471

Individual income tax eliminated

Full elimination phased over four years, with NO replacement revenue and no change to the 18% share. This is the aggressive end of the range, not a prediction. Corporate income tax remains in the URS base throughout, which is why the line does not fall to zero.

−$806,943

How this is calculated›

Derived from A.R.S. § 43-206 and the JLBC FY 2026 Baseline, with per-city distributions from the League of Arizona Cities and Towns. The statewide formula reproduces JLBC's published URS line to the dollar in FY2026, FY2027 and FY2028, and the population apportionment reproduces all 91 published city figures to the dollar; our test suite asserts both. The League's numbers are budget estimates from ADOR and ADOT, not settled distributions. These scenarios are conditional arithmetic rather than forecasts: they answer what the statute would produce IF collections changed by a stated amount. Alt30 takes no position on whether any of these changes should happen or will.