KINGMAN – The proposal to raise the countywide sales tax by a 1/4 cent failed Monday due to a lack of motion by the Mohave County Board of Supervisors.
While District 2 Supervisor Tom Sockwell made a motion to approve the proposed tax increase, neither Chairman Pete Byers nor District 3 Supervisor Buster Johnson seconded it, causing the proposal to fail.
The proposal would have raised the existing 1/4-cent excise tax to a 1/2-cent tax and would have, in turn, allowed the county to lower the property tax rate, according to County Manager Ron Walker.
According to Walker, the proposal would have lowered the current tax rate of $1.75 per $100 of limited value assessment to $1.52. If passed, this would have been the first time the tax rate had been changed in 16 years, he said.
“We believe we can achieve a better result for homeowners, and all residents of Mohave County, by attacking this problem locally,” Walker said. “The state Legislature has been working on a property tax ‘relief’ proposal which will do nothing for county residents. It is a blatant example of a corporate welfare where the tax burden of the average homeowner will be relieved by approximately $10 per year while the largest businesses in Arizona – mining, oil, gas and utilities – will have their tax burden lightened by hundreds of thousands of dollars.
“That state proposal to lower county taxes for giant businesses will negatively impact local services to our residents and small businesses while that same tax ‘relief’ proposal will barely buy a burger and fries for the average homeowner.
“This proposal is a tax reduction for Mohave County homeowners and a net reduction of taxes for residents,” he said. “The quarter cent sales tax will apply only to retail items. Food and medical care are not taxed. People just passing through the area and tourists will purchase those retail items, thus helping our local economy and social services.”
If the truth in taxation proposal was to go into law, it would have an immediate effect of 1.2 million dollar reduction in tax revenue for the county, according to John Timko, county finance director. If the tax rate was frozen at a 2-percent increase per year, and all other costs continue to rise at 6 percent per year, Timko said the county would consume its entire contingency fund within a four-year time frame. This would reverse, he said, the work they have built up over the last four years of fiscal discipline.
Despite the logic Walker used to explain the proposal, the potential sales tax increase met with mixed results from the public.
Tom Griffin commended the county staff for doing something positive about the property tax situation going on in the county. This is the first time, he said, that taxes have come up and make sense and he said he hoped it wasn’t the last.
Tony Dias, shared a different vantage point than most others Monday. Dias, a former California city manager employed during the time when Proposition 13 was enacted, said he understands where the county is coming from. He said he went through the fear that was had when the city government had to address the probability and then the actuality of Proposition 13 passing. They had to make serious changes, he said, changes he sees the county dealing with now.
In order to make up for loss in revenue from property taxes, Dias said, changing the form of financing or diversifying it was extremely smart government. Sales tax, he said, is the most logical and effective way to garner revenue and he commended the county for coming up with it.
On the other hand, there were many in the audience that did not see the changes as a clear-cut and intelligent way to reduce taxes.
Marc Goldstone, Chairman of the Arizona Tax Revolt, said, “I commend the county leaders for recognizing that a cut in the tax rate is warranted given the increase in assessed valuations.”
However, Goldstone also said that the county needs to come up with more creative ways to cut costs than to levy a different tax right back on the same people. Each of the county departments, he said, needed to take a serious look at expenses and see what could be cut. The departments needed to look at ways to cut costs in day-to-day operations to keep the county running more effectively without costing the taxpayers, he said.
Similarly, Lee Musick, who has been collecting signatures for the Arizona Tax Revolt movement, said that he has been noticing a trend among the complaints of the ones signing. Everyone is upset about his or her property taxes. Some, he said, have told him about 40- to 100-percent increases in property valuations this year.
“I understand that you are between a rock and a hard place, but people need relief,” Musick said.
While the idea of shifting the burden to sales tax would elicit about a 13-percent decrease in property taxes, Musick said it would not really help those seeing a 40- to 100-percent increase in property taxes.
The idea died for the time being for the lack of a motion. Proposals still exist at the state level for a possible decrease in property taxes for property owners around the state.