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Opinion: Clarifying the Issues on Prop 443
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21 June 2017   John Lamerson

PSPRS is a big, complicated issue.

In response to the eNews article, Opinion: The Truth on Prop 443 and Why You Should Vote YES, the Citizen's Tax Committee (CTC) felt there were statements that need clarification:

1. STATEMENT by YES: "our focus is clear, and full of purpose; to save the quality of life we all enjoy here"

  • The original presentation to place Prop 443 on the ballot was to pay down the Unfunded Pension liability. Now the supporters of Prop 443 make it clear it is a quality of life issue, but "for them". There is no remorse in their statements for the future generations or the people who will suffer from this regressive tax.
  • Presently the total sales tax in Prescott is 8.35%. The state’s portion is 5.6%, the County is .75%, and Prescott is 2%. An increase of .75% of the city’s portion of the sales tax will be on most goods and services in Prescott including groceries. Neither the State nor County taxes groceries. This is an ill-conceived tax on the poor and fixed incomes for the hobbies and entertainment for those living in the "Islands of Opulence" and the special interest groups that will gain from the tax.
2. STATEMENT by YES: The ballot language is written very clear: ". . .the revenue from which shall be dedicated to the payment of the City’s unfunded liability to the Public Safety Personnel Retirement System…" Simple and straight forward.
  • We agree, the ballot language is clear. However, it does not state "pay down" the unfunded liability. This is important as the current unfunded liability in the Annual Required Contribution (ARC) can be used by this city council for other city expenditures.
  • A councilman on the Yes for 443 PAC stated at a recent forum: "the purpose of 443 was always about freeing up money for the general fund". Also, the Prescott Courier’s survey to the candidates asked the candidates what would be done with the freed-up money if Prop 443 passes.
3. STATEMENT by YES: "Again, a lie. Every cent of the tax generated by Prop 443 will go to pay down the unfunded liability."
  • We agree, the ballot language is clear. However, it does not state "pay down" the unfunded liability. This is important as the present unfunded liability portion of the ARC can be used by this city council for other city expenditures.
4. STATEMENT by YES: "In the recent budget meetings, the Prescott City Council has discussed and agreed in principle that they should also add the normal pension cost ($1.35M) and the unfunded pension liability ($6.5M), totaling $7.85M to all of the funds generated by Prop 443. This will be a significant amount to pay down the unfunded liability."
  • Note the words in the above paragraph; "discussed and agreed "in principle that they should". Words have consequences therefore; the citizens of Prescott require iron clad assurances that all the current & new PSPRS funding for the next 10 years will be paid to PSPRS. The City Council now must demonstrate in writing these assurances.
  • The citizens should be skeptical of the assurances stated by City Council members "we must trust our politicians." How has this worked over the period of 2003 to 2016 where the PSPRS liability payments have grown 1375%.
5. STATEMENT by YES: "The City Council has been very clear, Prescott will pay its bill to PSPRS. They are constitutionally obligated to do so."
  • The PSPRS payment is not constitutionally mandated. The legislature created PSPRS by state statute and Prescott is bound by that. In any event, no legislature can pass any law forcing Prescott, or any city, to raise its sales tax to pay PSPRS.
6. STATEMENT by YES: "If Prop 443 fails, police, fire, library and parks/recreation will continue to be cut as Prescott’s unfunded liability payments consume more of its already strained General Fund. This is not a fear tactic – it is simply the factual truth."
  • If prop 443 passes, within a few years the City will be taking money from the general fund to make its ARC. The City of Prescott currently has $30 million in its reserve fund. Using only $20 million for the next 2 to 3 years for the standard PSPRS payment would make more sense.
7. STATEMENT by YES: "Do not be misled by the lies, the naysayers and their doom and gloom."
  • The YES for Prop 443 makes this above statement: "If Prop 443 fails, police, fire, library and parks/recreation will continue to be cut as Prescott’s unfunded liability payments consume more of its already strained General Fund. This is not a fear tactic – it is simply the factual truth."
  • It is not the CTC or the NO on Prop 443 who paint the doom and gloom.
  • The CTC is a messenger informing the citizens of this critical issue. The message is a threat to the establishment’s story that covers up the mismanagement of the PSPRS and how our elected officials are integral to this impending pension failure.

NO on Prop 443 has debated the opposition at the Republican Men’s Forum and the Chamber of Commerce, both can be seen on Prescott eNews. Please judge for yourself what message you believe.