Hunt Highway & Felix Rd.
Why Is This Conversation Happening?
Florence’s financial landscape has shifted in recent years:
The 2020 state prison closure reduced Florence’s population by approximately 3,000 residents, a 10% decrease, and resulted in an estimated loss of more than $3 million across the General Fund, Vehicle License Tax (VLT), and Highway User Revenue Fund (HURF)
The incorporation of San Tan Valley is projected to reduce Florence’s revenues by another $1.5 – $1.7 million annually
The purchasing power of state transportation funding has declined by nearly 60% since 1990 due to inflation.
Construction costs have risen 150% – 300% over the past 35 years
Transportation Funding Gap
$150M – 10 Year CIP Plan
$31.6M Fees on New Homes & Developments (DIFs)
$27.5M 10 Years of New Sales Tax Funding
$37.4M 10 Years of Current Funding $10.0M Grants & Private Partnerships $43.4M Unfunded Projects
Without the proposed sales tax funding, nearly half of the Town’s 10-year transportation plan ($71 million) would remain unfunded.
This initiative reduces that gap by $27.5 million, allowing Florence to advance more projects sooner and helping reduce long-term costs driven by inflation.
Planned Road Improvement Projects ($56.5M)
A. Hunt Hwy. – Franklin Rd. to Magic Ranch Widening Project ($7.2M)
B. Attaway – Palmer Rd. to Hunt Highway Widening Project ($6.45M)
C. Hunt Hwy. and Attaway Intersection Improvements ($500K)
D. Hunt Hwy. – Felix Rd. to SR 79 Design Concept Report ($9.2M)
E. Hunt Hwy. / SR 79 Intersection Signal ($2.0M)
F. Main St. Ext – Ruggles Rd. to SR 79 Widening Project ($3.3M)
G. Plant Rd. – Adamsville Rd. to Hunt Hwy Road Construction ($10.3M)
H. Adamsville Rd. – Main St. to Town Limits Road Improvements ($9.85M)
I. Centennial Park Ave. – Adamsville Rd. to SR 287 Road Construction ($2.0M)
J. Butte Ave. Bridge Replacement (East of SR 79) ($3.15M)
K. SR 79 – CAP Canal to Butte Avenue Design Concept Report ($2.5M)
At a modest 5% annual inflation rate, delaying these projects just three years could increase total costs by more than $10 million.
Finding Our Way To Solutions
Town Council is considering a proposal to increase the local sales tax rate by 1.5 percentage points. Of that amount, 1% would be dedicated specifically to road widening and transportation improvement projects, while the remaining 0.5% would support the General Fund, helping maintain essential services like parks and recreation, senior services, and public safety.
How much?
Over 10 years, this would generate $27.5 million dedicated to street capital projects and $13.7 million to the general fund.
Why Adjust the Sales Tax?
Adjusting the local sales tax creates a balanced funding approach that:
• Allows residents, visitors, and commuters who shop or dine in Florence to help support the transportation system without placing the burden on groceries, gas, or other essential needs
• Maintains flexibility in a changing revenue environment.
Florence by the Numbers
Tax Rates Across Arizona
STATEWIDE
The median local sales tax rate in Arizona is 2.95%. Florence currently charges 2%. The proposed rate of 3.5% would align Florence with other small and rural Arizona communities that have more limited commercial and retail tax bases.
• Communities such as Eloy, Benson, Cottonwood, Sedona, and Payson operate at or near this level.
• Smaller communities often rely more on local sales tax because they do not have the same volume of largescale retail activity as major metro cities.
• Florence’s proposal reflects the financial structure and infrastructure needs of communities our size.
Avoiding Costly Delays
construction cost index
Posting Date: 11/18/2025
FUEL TAXES FLAT. CONSTRUCTION COSTS RISING.
State fuel taxes, which help fund local road projects, haven’t increased since 1990, while construction costs have surged over the last 35 years:
• Asphalt up 317%
• Aggregate up 311%
• Concrete up 249%
• Steel up 143%
NATIONWIDE INDUSTRY TRENDS
Phoenix and the rest of Arizona have outpaced the U.S. in construction spending. It is also the top growth market in the U.S. for manufacturing construction.
Since FY 2021, the cost to construct the new freeway on SR24 has increased over 135%.
Funding shortfalls on Florence’s projects could increase costs in a similar way, which would further delay critical widening and road improvement projects.
Follow the Money
1.5 cent sales tax tracking
Arizona Department of Revenue collects all sales tax revenues.
Monies are deposited into the General Fund (funds are received in a lump sum payment from the State)
CIP Budget (Capital Improvement Plan) Directs future projects and outlines how they are paid for.
Street Sales Tax Fund The transportation portion attributable to the sales tax increase would be moved to a dedicated Streets Sales Tax Fund, restricted only to street projects and maintenance.
Commitment to the Future
Florence Forward is about responsible planning and long-term stability.
By strengthening our own funding capacity, Florence can:
Reduce reliance on shifting state revenues
Deliver critical road projects before costs climb higher
Protect essential services
Position the community for responsible growth
Reliable Funding For Roads
& Essential Services
Learn more at www.florenceaz.gov/2026-sales-tax-initiative