Tucson City Manager Mike Letcher revealed his strategy handling the city’s $32 million shortfall this week—and the options are grim.
Letcher, who wants the City Council to vote on a plan next Tuesday, Jan. 5, laid out a framework most council members will not be eager to support.
For starters, he wants the city to institute a landlord tax of 2 percent on residential rental payments, which will raise an estimated $10 million annually.
Even if he gets the rental tax, Letcher has more nasty medicine for the council to swallow, including:
• Laying off 89 employees as part of the elimination of a total of 377 positions, some of which are now vacant;
• Cutting city employee pay by 3 percent;
• Closing 17 city pools this summer;
• Reducing city assistance for neighborhood associations;
• Suspending the graffiti abatement program;
• Closing the Ormsby Recreation Center on the south side of town; and
• Cutting outside agency funding by 20 percent.
Without the rental tax, Letcher warns, the city would need to reduce outside agency funding by 60 percent and lay off more employees, including cops and firefighters.
Trying to balance the budget by cutting employee pay across the board instead of laying off employees would lead to pay cuts that were substantially more than the proposed 3 percent, Letcher said earlier this week.
Letcher wants the landlord/rental tax to be a temporary measure that would go away once city voters agree to
raise property taxes.
One thing that’s not in Letcher’s plan: A proposal to cut the pay of higher-paid city employees by a bigger percentage than that of lower-paid employees. That idea was floated by several council members at a meeting earlier this month.
A majority of council members we’ve spoken to in recent days opposed the rental tax, but whether they’ll stand by that next week remains to be seen.
Councilwoman Regina Romero says she and fellow Democrat Karin Uhlich wanted to go straight to putting a property tax on the ballot in November.
In a memo to Letcher, the two council members said they want the property tax to bring in enough money to fully fund public safety, the afternoon daycare program Kidco and graffiti abatement.
Leaving aside the observation that we might have less graffiti to abate if Romero didn’t fund graffiti classes with money from her office, we’re not exactly sure what “fully funding” means, given that the city could spend tens of millions more on public safety.
That’s an important point because the amount of a property tax would make a big difference in whether voters would get behind it in these recessionary times.
At any rate, next Tuesday’s council meeting promises to be a contentious affair.
This article appears in Dec 24-30, 2009.
I’m expecting Letcher’s proposal to be something of a prism for the current spectrum of interests fighting City Hall, most of them on the right. Humberto Lopez, who helped both the Council’s new Republican and Democrat get elected and contributed to the No on 200 effort, weighed in yesterday in a Star editorial calling for more “business-friendly” leadership in the city. He created a website for what he’s calling a “Take Back Tucson” campaign, but what he’ll do with it remains to be seen. Unlike some of the other influential voices in the business community (and to his credit), he’s not sounding the public safety alarm.
But others will continue to. Larry Lopez commanded an army of cops in political lockstep with Jim Click and the homebuilders both before and after the election, pushing the message that the Council doesn’t care enough about Tucsonans’ safety and that the city has the wrong priorities. The police and fire unions helped Republicans use the public safety issue to hammer Democrats, but they won’t be much help fighting a tax that will help the city fund their departments.
Then there’s the Tea Party, whose leaders oppose the tax on principle but have aligned themselves in many ways with wielders of the public safety hammer. Eric Ruden, the east side pest control guy who helped finance the Tea Party’s “Tucson’s Last Stand” event, formed his own group and is now calling for the ouster of Tucson Metropolitan Chamber of Commerce President Jack Camper. Councilman Steve Kozachik, who campaigned at Tea Party events in support of Prop. 200, recently scolded Ruden in an op-ed for his move against Camper, encouraging unity among the various factions. It looks like they’re off to a very rough start.
In his latest presentation Jim Nintzel continues to be confused over whether the slyly packaged Letcher/Miranda/TPD tax burden is on evil landlords or on the evil renters, forward slashes notwithstanding.
Perhaps it would be too much trouble to ask (or find) a brave UA economist what is going on with this…
Luke — As I told you at the Tucson First rally, we neither supported nor opposed Prop 200, only supported public safety on the principle that it is one of the very few core reasons for even having local government.
Given that the City Council has wasted so much money in the past few years, I believe most Tea Partiers oppose the renter’s tax and property tax outright. We refuse to believe that his is solely the fault of a souring economy; it is also the result of years of city mismanagement. People do not trust them to make the right decisions for this city because of it. While everyone else has taken pay cuts and reduced their spending, the city is trying to reduce their own hurt by shifting it to the taxpayer.
As for Councilman Kozachik’s article, I think read it as him giving a backhand to pretty much everyone in the business community pretty evenly for being so disorganized and petty.
But you have to rock the foundation to make things happen. I think we’re about to witness some major cracks unfold.
Robert, I know the Tucson Tea Party was neutral on 200. I simply noted that its supporters campaigned for it at Tea Party events. (Bill Arnold actually followed me around at Tucson’s Last Stand, warning folks of my affiliation with the dreaded Democratic Party.)
Yes, I think that’s where a lot of confusion came on that. We held a rally (in August or September, I believe) which was just a “support the police” rally, but there were a few people with pre-fab Prop 200 signs, so it got billed in the media as a Prop 200 rally. Oh well, lesson learned.
Prop 200 was a pretty poorly thought out gimmick. I think Steve and Ben could have handily won without it. But I don’t think anyone outside of City Hall realized we’d actually be faced with the possibility of both increased taxes AND less public safety positions.
January 5 should be interesting, hope to see you there!
The issue of a landlord tax vs. a property tax could not be more “rich vs. poor,” since the landlord tax will simply be passed on to renters. I know which side I’m on! But, let me put it this way: there are many very smart and motivated renters in this town who only live here for the weather and the relatively low cost of living. Start pushing these people out of town, and we’ll have what other states (like Maine, for example) call a “brain drain.” Having watched our downtown stagnate, and having taught a bit at the U of A, I’ll conclude with this thought: Tucson can’t afford to lose any more intellectual capital!
Ok, let’s look at it this way….A “renters tax” of 2%.
I myself am not all that adverse to that….but here’s the deal.
Instead of selecting a specific group (like renters for example), why not hit the whole hog? That is, renters, homeowners, as well as businesses, as well as the city government itself?
To pick on a specific situation, for example, “renters” why not hit everyone?
I’m positive that the “outcry” would be less, and also, if such a tax was spread evenly across the board (say to all) then there would be much less of a “halabaloo” about it.
Also, given that, across the board, the tax for all would be much less, renters, homeowners as well as businesses and (gasps) the city government who just so happens to own some prime real estate.
We are all in the same boat here….let’s sink or swim together, or so help me, I’ll do everything I can to vote these people out of office (the swine).
Rennits: Sounds like you’re talking about a property tax! But that would have to be approved by voters.
The same way a budget override or home rule would have to be approved by voters.
Mr. Letcher’s proposal evidently got the attention of one of perhaps Tucson’s most politically influential figure in the rental property business. (No, not Bruce Ash.) Apartment magnate Humberto Lopez doesn’t like a lot of things about the way the City’s been run, and he supported both the new Democrat and Republican on the council. (And opposed Prop. 200!)
There’s been much talk of regime change at City Hall; perhaps more since the election than prior to it. All that public safety rhetoric, the reporter at the Star, the guy on morning talk radio and the news on its silly sister TV channel, it adds up. Add to that a Tea Party with time on its hands, a bug man who wants to exterminate the Chamber of Commerce… it’s a wave of anger predictable in its relentlessness but in no other aspect.
The smell of opportunism is in the air. You know, like napalm in the morning.