With little more than a week before the November 5th election, it’s very possible the outcome of Proposition 478, the City of Prescott’s request to raise the local sales tax by 35%, has already been decided. The Citizens Tax Committee (CTC) has not polled the issue. If the well-funded supporters of Prop 478 have done any polling, they’re not telling anyone. Anecdotally, the idea of raising the local sales tax at a time of economic uncertainty is not popular with voters.
Nonetheless, just about every ‘Establishment’ figure who wants to curry favor with City Hall has jumped on the bandwagon to promote ‘public safety.’ Voters are being treated to a high dollar campaign of disinformation and fear mongering to convince them they damn well better go along with a higher sales tax or face reduced city services.
A group describing themselves as “small businessmen and concerned citizens” has managed to get out a few signs opposing the tax hike. But high priced mailers and radio ads are beyond their reach. They’ve chosen to remain anonymous out of fear of reprisal. Is that credible? Maybe. Politics of late has gotten meaner in Prescott. The losing side doesn’t just lose. They get punished. People are afraid to speak up. The price of anonymity is an underfunded campaign opposing higher taxes.
In Arizona, the threshold for forming a Political Action Committee (PAC) and naming organizers is $1400. Staying under that limit has kept the opposition effort anonymous but small. Meanwhile, the well-funded cheerleaders for Prop 478 and tax happy City Council members have been making the rounds of talk radio and private meetings to promote the tax hike. And taunting opponents as ‘anti-police’.
In recent elections the task of voter education on local tax initiatives has been taken up by the Citizens Tax Committee. This year our effort has been modest. Last month, our Board approved a banner ad ‘No on Prop 478’, to run in Prescott eNews, to target conservative voters. But CTC chose not to fund radio spots or run a major campaign as we have in the past. We figured the arguments in favor of the tax were so transparently specious that voters would see through them without our help. But given the importance of the issue and our traditional role in voter education, we now think it is important to inform the public of the reasons for our opposition to Prop 478.
We begin by noting that at the current tax rate, Prescott City revenues are trending higher. The 20% increase in prices over the last couple of years has been a windfall for the city. When shoppers pay more for what they buy, they also pay more sales tax. Of course, inflation means higher prices for the city government as well as for residents. But Prescott has also enjoyed higher tax collections through population growth. And the great majority of this growth has been from middle class and affluent retirees who make few demands on city services.
City officials have chosen to use their higher tax revenues for pay raises for city workers and to move City Hall to a snazzy new location on Sheldon Street. There’s more security at the new City Hall along with new carpeting and swivel chairs. This is not the place to question the wisdom or necessity of those choices. But the idea that Prescott is in dire financial straits and needs a 35% tax hike to address a crises in public safety is simply unsupported by the facts. No amount of poor mouthing on the part of city officials can change the fact that sales tax revenues are up and projected to stay up for the foreseeable future.
One of the more outlandish claims by tax proponents is that 61% of Prop 478 revenue will come from people living outside Prescott zip codes. But how could they possibly know that? Think about your last visit to Walmart or Costco. Did the cashier ask you where you lived? Did they offer to knock off 61% of your sales tax if you live in Prescott? I’m being facetious. But you take my point.
Prescott is a tourist town. Hotels and restaurants contribute hefty Transaction and Privilege Taxes. But some of those taxes are paid by locals who also patronize restaurants and whose family and friends use local hotels. The fact is, there is no reliable evidence as to how much of Prescott’s sales tax is paid by people who don’t live here. But the argument is really a bait and switch. The fact that visitors pay taxes when they shop in Prescott means more tax revenue for the City. But it doesn’t reduce the higher Prop 478 tax rate for locals. If you live and shop in Prescott, you will pay every last dime of the higher rate. Visitors aren’t paying 61% of your tax bill.
Finally, let’s take a look at the most questionable claim of all. Proponents of Prop 478 claim that higher tax revenues are needed for public safety. They claim that the growth of Prescott’s population requires more police and fire stations. But Prescott is a low crime city. That’s due to our demographics—older, mostly White, and relatively affluent compared to surrounding areas. The fact is, there is very little serious crime in Prescott’s mostly middle and upper middle class neighborhoods.
One City Council member has suggested that some of the tax money could be used to hire more traffic cops to write more tickets. She envisions a traffic detail patrolling Prescott streets and ticketing scofflaws. The prospect of a new revenue stream from harsher traffic enforcement has City Hall salivating. No doubt a traffic detail would target a lot of tourists. But what about locals? Is this what Prescott needs right now—more traffic tickets? Is predatory policing good public policy? It’s easy to imagine a windfall for city coffers. But hard to imagine such a policy making Prescott a nicer place to live.
Fires are no longer as common as they once were. Modern building materials have made structural fires rare. The great majority of 911 calls—well over 90%–are not to report a crime or a fire but to request medical transport. But Prescott has two private ambulance services who provide emergency medical transport at far less cost than the Prescott City Fire Department. The government is always the most expensive provider of services. Is this the time to ask local taxpayers to fund more government services when lower cost alternatives are available?
At some point it may make sense to build a new fire station or police substation in north Prescott where most of the population growth has been concentrated. But the people who bought those new homes knew where emergency services were located. They made a conscious decision to live a little further out. For the great majority of Prescott residents nothing has changed. Their homes haven’t gotten any further away from police or fire protection or emergency medical transport because of new residential developments in north Prescott. Why should they be asked to pay higher taxes to pay for other people’s choices of where to live? Isn’t growth supposed to increase the tax base and pay for itself? Or did tax happy politicians get us again?
In short, CTC submits there is no immediate public safety crises warranting a 35% increase in the Prescott City sales tax. Prop 478 as written is a permanent increase to Prescott’s base sales tax. There is nothing in the Proposition to require that the funds be used for public safety. The revenues go into the General Fund. A future city council is free to repurpose the revenues any way they chose. The Citizens Tax Committee believes Prop 478 as written is the wrong tax at the wrong time.
We respectfully urge a NO vote.
