The Gilbert Chamber of Commerce has submitted the following communication to Town leaders, as drafted by the Public Policy Committee and approved by the Chamber's Board of Directors.
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Dear Mayor Anderson, Members of Gilbert Town Council, and Staff,
The Town of Gilbert has proposed increases to specific Transaction Privilege Tax (TPT) classifications — including laundromats, car washes, restaurants and bars, and communications (landline and cellular services), as well as an increase in the annual business license fee from $2 to $50 per business. These measures are intended to address an anticipated $20 million revenue deficit beginning in FY28, yet when taken together, they do not resolve the projected shortfall. The Chamber’s concern is not solely the proposed increases themselves, but the risk of adopting permanent tax policy changes in the absence of a comprehensive, long-term fiscal plan. As such, the Gilbert Chamber of Commerce opposes the Notice of Intent of the proposed tax and fee increases.
Our opposition is not rooted in resistance to fiscal responsibility. We recognize that businesses must be part of the solution as we look to correct this shortfall. However, our opposition reflects concern about the lack of a comprehensive, long-term financial strategy and the permanent nature of the proposed changes. Once enacted, these increases will not be easily reversed, yet they represent only partial, short-term solutions to a multi-year structural revenue challenge.
Key Concerns
1. Piecemeal Solutions to a Structural Problem – The proposed changes address only a portion of the projected deficit. Implementing permanent tax increases without a comprehensive fiscal roadmap puts at risk:
- Creating long-term economic damage while still leaving future Councils with unresolved revenue gaps.
- Establishing a precedent of reactionary tax policy rather than strategic financial planning.
2. Disproportionate Impact on Restaurants & Bars – All businesses, and especially the restaurant and hospitality industry, have endured unprecedented challenges over the past five years, including:
- COVID-19 closures and capacity restrictions
- Regulatory & occupancy costs:
- Sales tax increases. The Town of Gilbert increased sales tax by .25% last year. Adding .75% to this industry represents a full 1% increase in less than two years
- Dramatic commercial rent escalations
- Increased development impact fees (tenant improvements)
- Operating costs:
- Inflation and supply-chain volatility
- Escalating cost of goods
- Rising water, wastewater, solid waste, and utility fees
- Labor pressures:
- Arizona minimum wage increases. Of note, minimum wage has increased from $12.15 in 2021 to $15.15 in 2026 – a total of $3.15 in just five years
- Increased cost of employee benefits. For example, healthcare premiums for some employers have increased by as much as 30%
Targeting this sector risks:
- Further erosion of already-thin profit margins
- Business closures or relocation
- Reduced employment opportunities
- Loss of vibrancy in Gilbert’s commercial districts
- Change in consumer spending habits
3. Lack of a Comprehensive Solution –
The Chamber strongly believes that the Town must:
- Develop and present a long-term, multi-year financial plan addressing the full $20M deficit and transparently reflect when components of the shortfall are anticipated. For example, the deficit resulting from lost tax revenue from tipped wage earners will not impact the budget until FY 28 but is being reflected as an immediate deficit in the coming fiscal year.
- Clearly articulate the revenue tools under consideration, their projected yields, and economic impacts.
- Engage the business community meaningfully before permanent actions are taken to ensure a fair understanding of the impact of these actions.
What the Chamber Is Requesting
We urge the Town Council to pause notice of intent of these proposed increases until a comprehensive solution is developed and vetted. The Chamber supports exploring solutions that include:
- A reevaluation of the timing and prioritization of Parks & Recreation and other capital projects.
- Identification of structural efficiencies and cost controls within Town operations.
- Transparent modeling of alternative revenue strategies with economic impact analysis.
We stand ready to partner with the Town to help craft sustainable, equitable, and growth-minded solutions that protect Gilbert’s economic vitality while ensuring the Town’s long-term fiscal health. We also stand firm in working alongside the Town to encourage state leadership to reconsider or reform recent state-level policy changes that have eroded municipal revenue streams and constrained local governments’ fiscal tools.
Your continued collaboration with and interest in the impact on businesses is very much appreciated. We are grateful for open communication and look forward to being part of the solution.
Approved January 17, 2026