The tax, now at 1.8 percent, would apply inside the city on the gross income earned by regular construction contractors, speculative builders and owner builders.

The 1.8 rate now brings in about $3 million a year. Increasing the tax to 4 percent is expected to raise an additional $3.6 million.

"I think the public needs to know that Casa Grande's one of the very last cities of our size to address this particular tax to improve our residents' dreams," Mayor Chuck Walton said. "This is something that we've put off as long as we can put off before addressing it as a necessity."

Finance Director Larry Rains told the council that "we know for a fact that the neighboring communities in Pinal County have increased their construction sales tax rate to very similar numbers. In fact, some are even higher than 4 percent now.

"There are a number of cities in the (Phoenix) Valley that are experiencing tremendous growth very similar to ours, and in fact exceeding our growth patterns, that have done the same."

Rains said Casa Grande's revenue now from taxes and other fees remains strong and is allowing the city to meet capital needs that it hasn't been able to fund for at least the past four years.

However, he added, "If you looked at the Capital Improvement Projects list you would find that we still have approximately $2 million of unfunded capital items that are being requested by our departments this fiscal year, 2006-07, just to maintain the new levels of service for many of our growing areas.

"And I think everyone realizes that with the amount of new development that we're anticipating to the west of our community, that's going to place even a higher demand on the department directors of our organization to build new fire stations, to buy new garbage trucks, to find a way to either expand the useful life of our landfill or prepare to close it and open a landfill.

"There's a lot of those challenges that are out there," Rains continued, "and we are finding that even when you consider our existing tax stream and our one-time revenues, as well as coupling that with our development impact fees, we're finding gaps."

There are also gaps on the operating side, Rains said, which the city is attempting to address "through voluntary contributions and through the encouragement of new retail business in our community and so on and so forth so that we have that ongoing operating revenue stream to provide those programs and level of service that everyone in the community has grown to love and desires."

Clouds are on the horizon in the Arizona Legislature, however, given a number of tax cut bills and special-interest legislation sponsored by developers and builders.

"There's an income tax bill that's being discussed that would reduce our state-shared revenues by $180 million, which would impact the city of Casa Grande in fiscal year 2006-07 by, I want to say, $210,000 the first year," Rains said.

"There's a number of property tax, income tax bills that are being circulated and we're keeping an eye on those and we'll certainly advise the council if anything materializes with those.

"And, as we find ourselves in every May, we're out here trying to develop a budget and there's potential changes on the horizon, so it's going to be no different this year."

The city considers construction sales tax as one-time income, and uses the money for acquisition, replacement or maintenance of capital assets rather than using it as operating funds.

The ordinance to increase the tax also calls for money to be sent to a separate fund to be used only for costs related to capital assets and improvements.

Final approval is expected at the May 15 meeting, with the ordinance becoming effective 30 days later.

In other action Monday night, the council:

-- Gave local approval for a liquor license for Mary Ann Versluis at the Cook E Jar.

-- Announced one vacancy on the Parks and Recreation Advisory Board, two on the Airport Advisory Board, three on the Library Advisory Board and one on the Board of Adjustment. Application forms are available at the City Clerk's Office in City Hall, 510 E. Florence Blvd.

-- Approved replacing the dining room and kitchen tile floors at Dorothy Powell Senior Adult Center at a cost of $10,513.

-- Approved purchase of a PowerLift bucket attachment for a backhoe at a cost of $4,560 and a disc harrow at a cost of $3,475, both for the Street Division.

-- Gave initial approval to changing zoning to general business at South Florence Street and Date Avenue for the Compton Motors expansion, and at the northwest corner of Overfield and Earley roads.

-- Gave initial approval to changing zoning to planned area development at the southeast corner of Trekell and Rodeo roads, at the southwest corner of Interstate 10 and Val Vista Boulevard, north of the northwest corner of Henness Road and Selma Highway, and at the northwest corner of Pinal Avenue and Ghost Ranch Road.

-- Approved a request for a major amendment to the city's General Plan changing land use to low-, medium- and high-density residential and commercial south of McCartney Road between Pinal Avenue and Trekell Road.

-- Heard a presentation about the 7,000-acre Legends residential development west of Francisco Grande and Desert Carmel.