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2017 could bring a lot of talk about increasing sales taxes

Road fixes, police & fire gear, preschools subsidies & property tax cuts could be funded

Don’t be surprised if you hear a lot of talk in 2017 about sales tax increases in Tucson and Pima County. 

There are at least four proposals for sales tax increases hovering, including two that are far enough along for possible inclusion on May and November ballots. One or both of the others would need approval by the state Legislature and are less likely to make it to 2017 elections.

If all four were enacted, residents would see many miles of streets repaired, county-wide property taxes reduced and up to 8,000 Tucson children eligible for preschool subsidies.

On the other hand, if all four were adopted, the average Tucson household would see its monthly expenses rise about $9 per month or $108 per year, according to city of Tucson calculations. Property tax cuts would offset some of that. Three of the proposals are for a half-cent sales tax.

Whether they all get on ballots and then get approved will be a challenge, given the competition among them and legal and political issues.

“That’s a lot of tax increases to put before the voters in one fell swoop,” said Steve Christy, a Republican who just won election to the Pima County Board of Supervisors.

 “It would be a rough road to hoe given this particular climate where economic recovery is still not a true reality that we are experiencing in Pima County,” Christy said.

Others hope that voters recognize the enormous need for road repairs, realize that they get worse if they aren’t fixed and that better roads can lure prospective employers.

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Tucson City Manager Mike Ortega said, “Our needs are what they are and so ultimately, it’s going to be up to the voters to decide how these needs are addressed.”

Farhad Moghimi, executive director of the Regional Transportation Authority RTA, said, “Maybe I am expressing my bias, but investing in transportation does have a return on investment. And we just haven’t invested enough in transportation."

Infrastructure is getting a lot of attention also at the national and Arizona level.

President-elect Donald Trump has proposed spending $550 billion over the next decade to rebuild many of America’s roads and bridges. And at the state level, a temporary Senate Surface Transportation Funding Task Force is taking testimony on Arizona’s needs and how they are financed and will present recommendations for improvements to the Legislature by Dec. 31.

Combined state and local sales tax rates in Pima County are now: South Tucson, 10.6 percent; Marana and Oro Valley, 8.6 percent; Tucson and Sahuarita, 8.1 percent, and Ajo, Green Valley and unincorporated Pima County, 6.1 percent.  Those rates include a half-cent sales tax everyone pays in Pima County to support the Regional Transportation Authority.

The local proposals are:

  • The city of Tucson is considering asking voters to approve a half-cent sales tax in a May 2017 special election. It would raise $250 million over five years to fix streets and buy more equipment for the police and fire departments.
  • Strong Start Tucson also wants a half-cent sales tax increase to increase the number of Tucson kids who can attend private preschools. They want to get this on the November 2017 ballot.
  • Proposals have risen from several groups and Pima County Administrator Chuck Huckleberry for an additional county-wide, Regional Transportation Authority sales-tax increase to raise $700 to $800 million over 10 years to fix and maintain roads throughout Pima County. This would require legislative approval before it could go to voters.
  • Huckleberry has also proposed a half-cent sales tax to reduce county property taxes. Legislative approval would be required to remove a roadblock – the need for unanimous Pima County Board of Supervisor consent.

Improving Tucson roads

Tucson is now researching and holding public meetings on a possible half-cent sales tax that would be used to fix neighborhood and major streets and buy vehicles, a helicopter, weapons and other equipment for its fire and police departments. The city's sales tax is now two cents.

City Manager Ortega said a final decision on whether to go ahead and what the ballot language won’t be made until January. Lane Mandle, a city spokeswoman, said there is even discussion about extending the tax beyond five years or making the levy permanent.

The city estimates that Tucson needs about $1.2 billion to improve roads, parks and buy police and fire equipment and buildings. The largest chunk is $532 million to fix neighborhood and local streets and another $168 million to fix major streets.

Tucson is also considering, for the November 2017 election, a $100 million bond issue to be paid off with property taxes. It would bring in $20 million a year for five years and be used to improve parks and build sidewalks..

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The city estimates a half-cent sales tax increase would cost just under $3 a month. That assumes the average Tucson household of 2.5 people earns $4,070 a month and spends 36.6 percent on taxable goods. So the estimated monthly tax increase would cost an additional $2.98.

The first public hearing was set for Wednesday night. Two more are scheduled for 5:30 p.m. Thursday at the Ward 6 office, 3202 E. 1st St., and 5:30 p.m. on Nov. 21 at El Pueblo Senior Center, 101 W. Irvington Rd.

Helping Tucson preschoolers

Out of the estimated 14,000 3 and 4-year old children in Tucson, fewer than 20 percent are enrolled in high-quality preschools. Strong Start Tucson proposes a half-cent sales tax to raise $50 million a year to ensure up to 8,000 children can attend for as little as $5 per week. Tuition to attend the private preschools participating in the program would be charged on a sliding scale, and $5 weekly would be for those families with the lowest incomes. The city would cover the rest of the cost with funds raised by the tax.

An independent seven-member commission appointed by the Tucson mayor and City Council would oversee the program, and preschool or daycare centers would have to be highly rated or at least accredited.

Penelope Jacks, chairwoman of Strong Start Tucson, said organizers need 9,800 signatures and hope to gather about 20,000 by July 6 to get the initiative on the November ballot.

There are some other programs that help fund preschool programs, namely federal Head Start and First Things First, which is funded by an 80-cents per pack tobacco tax. But those only help about 200 and 1,200 Pima County children respectively.

Strong Start Tucson organizers claim that children who receive high-quality education by the age of 5 are 40 percent less likely to need special education or be held back a grade and 70 percent more likely to graduate from high school.

Jacks said she doesn’t worry about competition with other sales-tax proposals.

“We believe the people want good roads, good transportation and they want a good future for our children. So when they look down, they don’t want to see a pothole. And when they look up, they see a future for our children,” she said.

Similar programs have been approved in Denver, San Antonio, Cincinnati and other cities, Jacks said.

Strong Start Tucson will have its kick off event will be from 5:30 to 7 p.m. on Thursday at Make Way for Books, 700 N. Stone Ave.

There is also a movement  in  Arizona for taxpayers to support full-day kindergarten. It would cost about $240 million, and is supported by a number of lawmakers and business leaders.

Expanding RTA tax 

The Pima Association of Governments in April estimated that after looking at all the money budgeted or expected so far for freeway, road, bus, road maintenance and other transportation needs in Pima County through 2045, there remains a $15 billion shortfall.

The Regional Transportation Authority is now halfway through a 20-year. $2.1 billion  program funded by a half-cent sales tax levied throughout the county. It can only be used for major projects that were already approved by voters, such as the Ina Road/I-10 interchange under construction and the two-year-old Sun Link street car in Tucson.

Various RTA and PAG committees have recommended another half-cent sales tax to be used just to maintain roads to keep them from getting worse. The Legislature would have to amend state law to allow an extra sales tax be levied by the district.

Pima County's Huckleberry also has included that proposal in the Board of Supervisors’ recommended legislative agenda for 2017.

He proposes a limited authority to let the RTA impose a 10-year half-cent sales tax to generate $800 million for repairs. The money could only be used for pavement repair and rehabilitation and any improvements to meet Americans with Disabilities Act requirements.

The money and projects would be administered by the RTA and allocated to municipalities according to their population. Tucson would receive 52.5 percent; unincorporated areas of Pima County, 35.8 percent; Oro Valley, 4.3 percent; Marana, 4.1 percent; Sahuarita, 2.7 percent and South Tucson, .6 percent.

Even if the Legislature authorized that, the RTA's Moghimi said it would take months or years to have public hearings and figure out the  exact projects to include so voters would know exactly what they are voting on. Christy, who has been on the State Transportation, PAG and RTA boards, cautioned that it would an “arduous” process.

“It requires great deal of public input and a lot of collaboration among governmental entities. And it’s going to require a lot of introspection and focus to come up with a game plan. First of all, more than anything, we have to have the buy-in of the public. And at this point, I think that is going to be a challenge,” said the incoming Republican supervisor.

Moghimi said the organization also is hoping the state Senate Surface Transportation Funding Task Force will recommend to the governor and Legislature that oreganizations like the RTA be allowed to impose an additional half-cent sales for road maintenance.

 “In the past we haven’t had a history of being able to prioritize transportation at the state level, so we hope this might be an opportunity to have that conversation. We are all hopeful,” he said.

Reducing property taxes in Pima County

Pima County is the only county in the state that doesn’t charge a sales tax and as a result, has to rely more heavily on property taxes. State law permits counties to enact sales tax but only if their boards of supervisors unanimously approve. 

And because the Pima County Board of Supervisors has refused, Huckleberry is recommending that the board ask the Legislature to permit approval of a special sales tax by a simple majority. That tax would be used solely to reduce property taxes.

Huckelberry tried to push a county sales tax in 2007, which also would have been used to cut property taxes. That move was blocked by outgoing Supervisor Ray Carroll. The Republican, who announced earlier this year that he would not seek another term, also stonewalled a 1997 proposal for a county sales tax.

Huckleberry said, in a memo to the board, that such a tax would let the county shift some of the cost of running the government from property owners and help reduce property taxes. He estimates a sales tax could reduce the property tax rate by 21.7 percent in its first year.

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1 comment on this story

Nov 17, 2016, 12:05 pm
-0 +0

Roads: yes
Preschool: no
Property tax reduction: no

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