The Chamber is planning a “SuperForum” for candidates that will take place Tuesday, July 21 at Yavapai College’s Performing Arts Center. Watch for more details on this event in future newsletters. The potential financial questions that will be on the ballot all involve sales tax changes.
The Council must decide by May 27 which measures will be placed on the primary election ballot Aug 25. The Chamber has spent considerable time discussing the merits of each issue and has made a series of recommendations to the mayor and council. First, the City will refer to the voters a 1% sales tax effective Jan. 1, 2016 and continuing for 20 years, for the sole use of streets and roads maintenance and rehabilitation.
The City currently has a 1% sales tax primarily for streets and roads, but that tax is set to expire at the end of 2015. The new 1% tax would result in no increase in the current tax rate and would stay in place for 20 years. The Chamber supports this tax as necessary for keeping our transportation system intact and maintained. The next proposal is somewhat complicated and will need much discussion between now and the election.
The City learned recently that it is on the line for $71 million in unfunded long-term liabilities for the pension system that police and fire personnel utilize. Other communities around the state received similar notices. In Prescott’s case, police and fire personnel are paid from the general fund and the bulk of that fund comes from sales tax revenues.
The City has developed a number of scenarios for repayment—all involving a sales tax increase. The Chamber said in our comments to the Mayor and City Council that “although we strongly dislike being painted into a corner because of mistakes made in the past, we acknowledge that the pension debt must be paid.”
The Chamber recommended that the City Council refer to the voters a .55% sales tax effective Jan. 1, 2016 with the understanding that this tax will sunset as soon as the debt owed has been repaid. Other, more aggressive sales tax numbers were proposed by City staff, but the Chamber could not support the higher amounts.
We also acknowledged that “this is a very complex issue and full transparency will be necessary to convince voters of the importance of passing this tax. It would also be helpful, in our opinion, if the City could show ongoing efforts to reduce the overall impact that public safety employees have on the City’s general fund.”
The final, potential item for the ballot is expected to be an open space measure to fund maintenance of existing open space and potential future open space acquisitions. This can be part of our quality of life and the Chamber said that we would support the creation of a .08% sales tax effective Jan. 1, 2016 and continuing for 20 years.
Finally, the Council must decide how to package the tax proposals on the ballot. The Chamber believes that each of the three potential ballot issues deserves to be voted on separately. These are three very different items and should be viewed individually.
The Chamber’s Board believes that the future of our community is at stake. These are important issues and deserve close attention in the months leading up to the primary and general elections.