The 32,800 students who live off campus can breathe a sigh of relief after the Tucson City Council voted not to consider a two percent landlord tax in an effort to close the $32 million budget deficit.

People voiced outrage over the tax before a packed council meeting on Jan. 5 at the Tucson Convention Center.

The council rejected the motion unanimously and members told City Manager Mike Letcher to find other ways to close the deficit.

“”Ninety percent of the people that are living in this community are living at or near the poverty level,”” said Steve Kozachik, Ward 6 councilman and UA associate director of athletics. “”You don’t ask people who are living at the poverty level to ante up. There are other ways to find the money.””

Apartment complexes that are designed to cater to students welcomed the news.

“”I received an e-mail from (our) corporate office saying, ‘Good thing it didn’t pass,'”” said Roger Becks, community manager for NorthPointe Apartments.

According to Kozachik, had the tax passed, it would have taken effect immediately.

Students who pay $600 a month for rent would add on an extra $12 a month, which comes out to  $144 per year.

“”What a lot of people don’t understand is about five to seven percent of the rent goes to pay property taxes so it’s like double taxation,”” said Melanie Morrison of MEG Management, which manages numerous apartment complexes across the city.

Tom Cuthbertson, general manager of The Seasons, said those who are entered in a lease wouldn’t have seen an immediate increase, as it’s illegal to raise rent in the middle of a lease. But those who have a general verbal agreement with their landlord could have felt the effect.

“”A lot of times when you rent houses, they sometimes have a handshake agreement, but anybody who enters a lease agreement can’t alter the rent until the lease is up,”” he said.

Last week’s vote killed the latest attempt at the renters’ tax, a tax also proposed in April 2009. Margie Rodriguez, a Tucson resident who spoke at the council meeting, worries that with the city’s current deficit for the 2010 fiscal year and a possible budget deficit for next year, a renters’ tax may not be a dead issue. 

“”This is the third time I’ve stood in front of them with this issue and thinking I may have to come back,”” Rodriguez said.

Though Arizona is one of only two states that have renters’ taxes, Tucson and Flagstaff are the only two cities in Arizona that don’t.

“”Most of the states have outlawed it by state constitution, and I’m hoping that our state legislature gets their act together so we don’t have to do this again,”” Kozachik said.