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Opinion: Prop 443 Earthquake - Prescott Has $123.5 Million in Bank

14 August 2017  

PROP 443 Earthquake: Prescott has 123.5 Million in the Bank. 

Representative Noel Campbell's announcement that he is voting NO on Proposition 443, the Prescott tax initiative to raise the city sales tax by .75%--a 37.5% increase over the current rate-- is an earthquake in an election season that has seen no shortage of drama. 

Campbell initially described himself as a "soft yes" on the tax hike, with the caveat that the city continue to make their annual pension payment from the General Fund and use new tax revenue to pay down the unfunded liability. 

However, in recent weeks his support weakened as the two mayoral candidates who are pushing the tax hike, Councilwomen Jean Wilcox and School Board President Greg Mengarrelli, have publically waffled on their plans for spending the estimated 10 million in new revenue the city expects to gain. Wilcox is now talking about new spending to expand city government. Mengarreilli refuses to say what he might do. The third mayoral candidate, Mary Beth Hrin, remains a steadfast opponent of higher taxes and an vocal proponent of pension reform.

For Campbell, the popular LD1 Representative, his final break with the Big Tax came when he gained access to financial reports showing the city government holding 123.5 million in cash and investment accounts. In a memorandum dated August 1, 2017, from City Financial Officer Mark Woodfill thru City Manager Michael Lamar to a party whose name has been blacked out, he learned the City has cash and near cash investments totaling 123.5 million dollars. Thirty six million is held for current operations and 87.5 million is classified as unneeded for current operations and held in investment accounts with the State Treasurer. 

This cash horde dwarfs an earlier estimate of 30 million in reserves claimed by the No on Prop 443 committee. The 123.5 million is enough to pay off the city's entire 78 million PSPRS liability with 45 million left over. Phil Goode, candidate for city council and opponent of Prop 443, acknowledged, "I was wrong in saying 30 million. I never imagined they were holding back that much money." 

My question is, "How is this possible?" The ballots have gone out and citizens are voting.

Several of the most outspoken advocates for a higher sales tax are city council members. 

Why haven't they told us about the reserves? Instead, they've been threatening service cut backs and even bankruptcy if voters don't pass a higher sales tax. Isn't this the same old fear mongering we've heard before: "Give us your money or we'll stop answering 911."

The city's 123.5 million in reserves is like a savings account. They represent taxes collected over many years in excess of current needs. In fairness to Prescott's tax happy politicians, no one disputes that reserves are needed for contingencies and the replacement of trash trucks and cop cars. But is it too much to ask of our elected officials that before they sell us a tax hike, they tell us how much we already have in the bank? 

This is an important question for Representative Campbell, who chairs the State Legislature's Ad Hoc Committee on Pension Reform. Along with six other State Representatives, including myself as Vice Chair, the Committee is looking for long term solutions to the public safety pension fund's spiraling costs. New ideas and support for change are emerging. 

Representative David Livingston (R. Peoria) has proposed referring the pension clause in the Arizona Constitution back to the voters. That's an idea Representative Campbell and I have promised to sign onto. Senate President Steve Yarborough has stated that we need to revisit pension reform and take another look at the pension clause. This is real progress. 

Of course, it will take time to go thru the legislative process and submit the matter to Arizona voters. But the good news is that we now know Prescott has the reserves to avoid cut backs until lasting reforms are made at the state level. Representative Campbell has seen the proof. 

The question now before voters is "Will the truth set us free?"

Follow the link and see the original documents for yourself.