County Administrator Chuck Huckleberry has a new plan to hike the local sales tax to fix Pima County’s deteriorating roads, but the success of that proposal will hinge on persuading state lawmakers to allow the Pima County Board of Supervisors to approve a sales tax with less than unanimous approval.
The plan could work in conjunction with District 4 Supervisor Steve Christy’s “Just Fix the Roads” proposal, which would implement a countywide half-cent sales tax and rescind the special property tax, enacted last June, to raise money for road repair. Huckleberry’s plan would rescind the recently adopted property-tax hike and reduce property taxes even further.
Currently, enacting a half-cent sales tax increase would require a unanimous vote of the board, which seems unlikely, considering District 1 Supervisor Ally Miller has been vocally opposed to it. Miller created a “30 Day challenge to find road money” on her personal website, full of allegations of spending malfeasance on the part of Pima County. Most of those alternatives have been shot down by Huckelberry in a series of memos that assert that Miller is misinformed about the county budget.
But if the sales tax is tied to a property tax reduction, Huckleberry is hoping it will entice the state legislature to change that unanimous-vote rule, so a majority vote could enact the tax increase.
“There are interests in the Phoenix area, particularly in the legislative arena, that basically are concerned about their transfer of money from Phoenix to Tucson,” he said, at a Sales Tax Advisory Committee meeting on Nov. 13. “We might find support in the legislature.”
Here’s the back story on what Huckelberry is discussing: In 1980, Arizona voters approved a 1 percent property tax cap, with the state required to pay the amount of a property tax exceeding 1 percent of the home’s value. The state’s share—known as the homeowner rebate—cost an additional $24 million in the last fiscal year, and will increase by $3 million with the county’s latest property tax increase, according to Arizona Tax Research Association.
“In essence, Pima County just raised taxes on all taxpayers in Arizona to fund its transportation program,” the Arizona Tax Research Association wrote in its September newsletter about Pima’s road-repair property tax increase.
Because the property taxes have grown so high in Pima County, the state is essentially required to pay 47 percent of the property tax for homeowners in Tucson Unified School District, or $386 million annually, according to ATRA. So, the lower Pima’s property tax, the lower the rebate that the state is obligated to send to Pima County residents.
Huckleberry’s proposal would put part of the half-cent sales tax toward a property-tax reduction. In one scenario, the plan would raise $812 million for road repair over 16 years and generate $760 million in property tax reduction.
That would translate to a $12,000 saving for a $500,000 commercial property over that same time period, according to a presentation Huckleberry gave to the Sales Tax Advisory Committee meeting. A residential property owner with a $165,000-valued home would save $2,151, except those living within the Tucson Unified School District, who would save $467 over 16 years, saving less because of the substantial portion the state pays of their property tax.
Huckleberry said his plan has two objectives: “First objective, fix the roads. Second objective, get us off the bull’s-eye or the radar screen of Phoenix by making us not the highest property-tax county in Arizona.”
Pima County is the only county in the state that doesn’t already have some form of county sales tax (other than the half-cent that goes directly to the Regional Transportation Authority, which adds to why property taxes are so high, according to the county’s website. One of the concerns of a sales tax is that it adds a burden on the poor, even though it’s exempt from unprepared food, prescription medicines and long-term residential rentals.
Sales tax “has a disproportionate impact on low- and middle-income individuals, many of whom are renters,” said committee member Mark Clark, the CEO of the Pima Council on Aging and a member of the Sales Tax Advisory Committee. “While I’d like to believe that landlords would reduce rent if their property taxes went down, I have to admit to being a little suspicious of that assumption.”
The hope is that landlords would be forced to reduce rent in time due to competition, Huckberry said.
Christy said he’s very hesitant to back a sales tax for anything but roads, but he’s open to Huckleberry’s proposal, as long as the Regional Transportation Authority oversees the road repair finances—an integral part of his plan.
“The RTA enjoys the universal confidence of Pima County residents,” Christy said. “The RTA is an independent, regionally administered, transportation-focused entity that has an unprecedented, proven track record of success.”
The county estimates a half-cent sales tax would raise about $80 million a year, while officials predict the existing road property tax would only raise about $19 million a year. With an estimated two-thirds of 1,200 miles of Pima County roads in poor or failed condition, it will take between $300 million to $1 billion to do all the necessary repairs, according to the county’s transportation advisory committee.
Christy presented his plan at a forum held by the Marana Chamber of Commerce the morning of Nov. 13 to about a dozen chamber members, a number of whom raised the same concern: Marana has done a good job maintaining their roads, so why would they want to pay a new sales tax to help the rest of the county?
Christy replied that Marana, like every jurisdiction and unincorporated Pima County, would get a certain amount based on population, then would work with the RTA to decide which roads to prioritize. Of the funds a jurisdiction already has set aside for roads, they could reassess and allocate it where ever they saw fit.
“It would free up their ability to use their own funds for other road repair and expansion,” Christy said.
And—Christy pointed out at the meeting—Marana drivers are also driving on and enduring pothole-ridden roads throughout the county.
As of yet, the Marana Chamber of Commerce is not taking a position, said Chamber President Ed Stolmaker. But Huckleberry’s proposal may not entice support from Marana or neighboring Oro Valley, known for impeccable road upkeep, since neither town have a town-wide property tax.