Kingman city tax proposals to get hearing
3/7/2013 5:59:00 AM
By Doug McMurdo
KINGMAN - The prolonged economic downturn has the City Council scrambling to find new revenue sources while mitigating the impact to residents.
To that end, Mayor John Salem and council members on Tuesday voted 5-1 to hold a public hearing April 2 to discuss a number of potential ordinances.
They are: Decrease the tax rate on bars and restaurants by 1 percent; increase the tax rate on all categories by either one-half or .65 percent; and decrease the water rate by $2 a month.
A public hearing regarding another potential ordinance to decrease the sewer rate by $2 a month was postponed until fall.
According to the city, it would lose roughly $600,000 annually if it cut the bar and restaurant tax by 1 percent; $432,000 annually by cutting the water base rate and $216,000 annually if the sewer rate was reduced.
On the other hand, a half-percent increase in sales tax would yield an additional $2.25 million to the city and the .65 percent increase would net $3.36 million.
"A lot of brainstorming went into this," said Salem, adding that the Chamber of Commerce played "a big role" in the talks and that city staff adopted a portion of the organization's proposal.
"I think it's something that could be done," he said.
Councilman Richard Anderson, who cast the lone nay vote, said the numerous discussions focused on one issue: "How can we get money into the city that will have the least amount of impact on residents? That's what we're trying to do."
Revenue that isn't there anymore - due in part to diverted or diminished highway user funds, vehicle license taxes and state shared sales taxes has hit the city hard, making it difficult for the city to fund capital improvement projects.
The police and fire departments require a number of improvements, many mandated by the state and federal government. Other projects on the city's to do list are several street enhancements, expansion of the sewer system and the railroad quiet zone planned for downtown.
"The realization of being able to try to fund these is not within our capability with the current budget," said Anderson.
"This is not a money grab," he said a few moments later. "These are projects we believe will stimulate the quality of life in Kingman."
If the ordinances pass, Anderson said the annual financial impact to Kingman's 28,000 residents would average about $100 for an individual taxpayer and about $250 for a family.
Councilwoman Erin Cochran said her one concern regarded the proposed decrease in the sewer rate.
"We are only two months into the sewer rate increase," she said. "I don't think we have enough information to do that. I don't want to say let's reduce it by $2 and then in October say we were just kidding."
The majority of the City Council agreed with her.
The potential reduction in the sewer rate will be revisited in the final quarter of the calendar year.
If approved at the public hearing, the changes go into effect July 1, the start of the 2013-2014 fiscal year.
Councilwoman Carole Young was absent.