In an effort to maintain “continued, unhindered growth,” the Marana mayor and council are considering enacting a new sales tax increase to provide additional funding for several multi-million dollar infrastructure projects.
Yiannis Kalaitzidis, Marana’s finance director, recently told the council current funding sources are not meeting their needs. These funding sources, such as grants, are limited and always in competition with other municipalities. More sales tax revenue would increase the town’s ability to pay for projects they have in the pipeline.
These new projects, Kalaitzidis said, will ensure the town is well-equipped to manage its increasing population and maintain older existing infrastructure for safety. The Town of Marana has been deemed one of the fastest growing municipalities in Arizona.
Kalaitzidis also said it’s not “practical” to expect developers to pay for those infrastructure upgrades on their own.
The areas town staff see as necessary for improvement in the future are water quality, water system reliability, storm drainage management and road improvements.
Kalaitzidis said many of these projects will have “recovery elements” which are other funding sources that could make up for whatever the sales tax covers. These could be grants from outside agencies, impact fees or even money awarded from litigation, specifically the lawsuit that Marana and the City of Tucson are currently engaged in against 3M over unregulated compounds in their water systems.
Mayor Ed Honea said during a Sept. 24 study session that he has “mixed emotions” about the idea of a sales tax increase, saying growth should pay for itself.
He believes only the water quality and system reliability projects are absolutely necessary, but wasn’t completely closed off to the potential tax. He told Kalaitzidis to come back with a list of specific projects that the sales tax would be used for, so that the council can relay that information clearly to their constituents.
Council member Dave Bowen expressed a similar ideology, requesting that staff provide a matrix with options for different sales tax percentage increases and what those different options could fund.
Bowen said he has long believed that it costs more money to run the town than they have been collecting in taxes, and now the costs of these projects are mounting. He cautioned the staff and other council members that they shouldn’t raise the sales tax in order to pay for something that citizens consider to be a “superfluous waste of money.”
“Especially with several of us facing election next year, if we go ahead with this, we’re probably going to be having to answer for it,” Bowen said.
Honea compared the situation to Oro Valley, where “they raised the sales tax a half percent and the mayor and three council members lost their jobs, because the citizens were not really sure they were doing the right thing.”
Marana’s current sales tax rate is 2 percent. With state and county sales tax included, the total rate is 8.1 percent.
Council member Jon Post doesn’t believe the increased tax will be an issue because Marana’s sales tax rate is already lower than other neighboring municipalities like Tucson (2.6 percent) and Oro Valley (2.5 percent).
Although he isn’t a fan of sales tax, Post believes the extra money could “move the town forward.”
“I own a business that passes this to my customers, and I know they don’t appreciate sales tax very much, but I know there’s a lot we can do with it here in the town,” Post said.
He requested staff only include projects with a recovery element so the money they receive in tax revenue could be stretched even further.
Council member Patti Comerford cautioned her colleagues, saying they need to make sure they “have their ducks in a row at home” before they increase the sales tax.
“We have to prove to our constituents and to our residents and to our business folks that we have been absolutely the best stewards of our money,” she said. “If we’ve been able to pay for Tangerine, if we’ve been able to pay for Ina, if we’ve been able to do all these things, how did we do it without a sales tax, and why is it different now?”
The Ina Road Interchange and Tangerine Corridor projects were funded primarily through other agencies such as the Regional Transportation Authority, Town Manager Jamsheed Mehta said in a phone call. Marana paid $8 million and $21.4 toward Ina and Tangerine, respectively.
Mehta said the amount of growth happening in Marana requires new funding sources because the town won’t be able to pay the high amount of debt service associated with the infrastructure projects they need to accomplish.
At the September meeting, Post said this case is different because the sales tax would cover multiple different projects. He claimed the town should pay to have construction work done now and then collect some revenue from the developers once they come in.
Council member Roxanne Ziegler said the sales tax increase would be an “easy sell” to residents, because it will maintain a high quality of life in Marana.
She said placing the entire cost on the developers is not the right way to go, and that exact strategy has not worked for Marana in the past. She said it might turn people off from doing business in the town.
“We’re getting taco stands and Bisbee Breakfast Club, love them, but there’s other things we need in this town, and that’s business,” Ziegler said.
Town staff will present a detailed list of projects and more information about the potential sales tax at a public meeting in early November.