City Staff Studies Options For Tax Hikes.
By Dave Devine
TUCSON'S recommended budget for the next fiscal year contains no new tax increases. But hold on to your wallets, because over the next 12 months a series of tax hikes is possible.
In the near future, City Manager Luis Gutierrez will be presenting the City Council with ideas to increase the sales tax, the property tax and water rates, as well as proposing an unidentified revenue raiser. If all are approved, city residents could be paying a lot more for government services in the new century than they are now.
The first proposal would raise the city's two-cent sales tax by a quarter cent, with the new funds--amounting to almost $17 million in the first year--devoted exclusively to transit uses like the Sun Tran bus fleet, the Van Tran transportation system for the disabled, and a new transit maintenance facility in northwest Tucson.
The funds the city currently spends on these programs would not be reduced. Instead, if the voters approve this increase, the new money would be used to improve the existing transit system.
The City Council started discussing the issue last Monday, May 10, but quickly decided to postpone the issue for another month.
"Tucson is hugely behind the eight-ball when it comes to transit services," says Councilman Fred Ronstadt, a Republican who represents midtown Ward 6. Ronstadt says that new funding is needed to expand Sun Tran routes and maintain the bus fleet. Despite Pima County voters' overwhelming rejection of sales tax increases three times in the last 13 years, Ronstadt is optimistic about the proposal's chances.
Councilman José Ibarra disagrees, arguing that placing the measure before the voters now will do more harm than good. Ibarra, who represents westside Ward 1, says the city should improve Sun Tran service within its current budget to show the city can operate an efficient system before asking for more money.
Ward 3 Councilman Jerry Anderson is undecided about the idea. He wants the Council to also consider a half-cent increase, which was proposed by the city's Citizen Transportation Advisory Committee. Anderson says that if the proposal is expanded to impose transportation impact fees on new construction, while also looking at diverting some of the funds now slated to build a new City Hall, he might support placing the sales-tax question on the ballot.
The second possible revenue-raising option will be presented to the Council by January. City staffers are studying various options for "a new revenue source that would assist in maintaining and stabilizing (the City's) fiscal strength over the next several years," says Gutierrez, who wouldn't elaborate on what the recommended new tax might be.
The third proposed tax hike would result from a city bond election scheduled for next year. Gutierrez is proposing that $129 million in general obligation bonds, which are repaid through property taxes, be put before the voters. He also asks the community to vote on approving $25 million in transportation revenue bonds and $115 million in water revenue bonds. Passage of the water bonds would result in annual water bill rising between 4.5 and 5.5 percent.
City staffers are currently preparing a list of bond-funded recommendations. A citizen committee will review the list before it goes to the City Council for approval. After that, city voters would have the final say. Two areas which promise to be contentious in this process: the possible inclusion of funds to support the construction of "affordable" housing, and millions of dollars to build a park in the so-called sustainable community of Civano.
Timing might also be a problem for the bond election. Traditionally, bond elections are in May. But Pima County is likely to substantially increase property tax rates, with tax bills due on May 1. Gutierrez says he may schedule the election on another date to avoid backlash from voters.
Gutierrez has included $50,000 in next year's city budget to conduct a public opinion poll on the bond questions. Perhaps while they're at it, the pollsters could ask people if, in low-wage Tucson, all these new taxes can be afforded.
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