The Function of State-Shared Revenue is:

• To promote local self-determination and the highly decentralized governmental system that we have in Arizona.
• To provide a certain amount of fiscal equalization. Communities across the state vary greatly in their wealth, and therefore, their ability to raise revenues and provide services locally.
• To simplify and reduce the number of taxes Arizonans pay.
• To fund local services. More than 40 percent of a Glendale's general fund is made up of state-shared revenue.

What is state shared revenue? The state of Arizona distributes a portion of the revenue it collects with local governments in Arizona. Cities and towns use this money to fund local services. In Glendale, these revenues make up over 40 percent of our General Fund. The General Fund provides the basic municipal services most needed and wanted by our residents - police and fire protection, courts, street repairs, parks and recreation programs.

How was the System Developed? Voters approved the system of state-shared revenue through a series of voter passed initiatives that span six decades.

How is state shared revenue being affected? During the 2002 state legislative session, Arizona’s cities and towns worked with state leaders and agreed to a reduction of state-shared revenue distribution from 15 percent to 14.8 percent for two years – a $10 million hit to Arizona cities and towns.

• This agreement was reached based upon a promise by the Legislature that the distribution would revert back to the voter-approved 15 percent after the two years were up (in fiscal year 2005), and that cities and towns would not be threatened with additional reductions.
• Additionally, Beginning FY 2004, municipalities will receive $70 million less in revenue sharing, due to a decline in state income tax collections. While the state began to feel this decline already, there is a two-year delay in income tax distributions to cities and towns. Thus, this additional impact will not be felt by cities and towns until this summer.