Kingman abandons vote on restoring property tax

City Councilwoman Jen Miles, far right, said the Council needs a strategic plan that citizens can support before asking them to vote for a primary property tax at Tuesday’s meeting. The Council ultimately agreed, although not necessarily for the same reason. From the left is Councilmen Larry Carver and Stuart Yocum, Vice Mayor Carole Young, Mayor Richard Anderson, Councilmen Mark Abram and Ken Dean, and Miles.

City Councilwoman Jen Miles, far right, said the Council needs a strategic plan that citizens can support before asking them to vote for a primary property tax at Tuesday’s meeting. The Council ultimately agreed, although not necessarily for the same reason. From the left is Councilmen Larry Carver and Stuart Yocum, Vice Mayor Carole Young, Mayor Richard Anderson, Councilmen Mark Abram and Ken Dean, and Miles.

KINGMAN - There will still be a special election on May 17 - to decide Gov. Doug Ducey's education funding plan - but the city of Kingman property tax question will not be on the ballot.

The City Council in a unanimous vote Tuesday decided to postpone any attempt to impose a primary tax on Kingman's property owners - and their renters - after failing to unite behind the effort to stabilize revenue.

"We have failed this city," said Councilman Larry Carver, in one of several comments made during the discussion that raised eyebrows at City Hall. Carver was referring to the Council's efforts to push for a property tax - or for any means to stabilize rocky revenues - for the past two and a half years. Members bumped up the sales tax a half-cent beginning July 1, 2013 after cutting 10 percent of staff and millions of dollars in expenses.

The half-cent increase was supposed to be temporary until a revenue source more reliable than sales tax was discovered. The Council had the option of divorcing itself from the Kingman Fire Department, which would form a standalone district, or pursue the first primary property tax in the city since 1980, when the Council dissolved the levy. But fire districts in the state are struggling, and the decision to pursue a property tax was made. Either way, voters would have decided the issue.

The decision, however, was not put into action until last year, giving the Council scant time to educate the public on the need for the tax. In fact, the Council itself could never agree on two essential elements of the effort: The base levy amount and what the tax would pay for.

While the Council was unanimous in its decision, the discussion leading to the vote demonstrated far less unity, including comments from residents.

Longtime Council critic Harley Pettit asked the Council to limit voter eligibility to property owners, saying the tax targeted only them. Voting laws and constitutional protections aside, Pettit's suggestion was not considered viable since renters would see an increase in rent - in many cases rent that is owed to a property owner who doesn't live in the city, or even the state.

Resident Doug Dickmeyer urged the Council to postpone the decision. "This is the most important legislation to come before Kingman voters in the last 35 years," he said. "You pick a number and think you can sell it to the public."

For months, the figure for a base levy was $3 million, with that revenue going to public safety. Earlier this month at a work session to discuss the taxes, Carver suggested a $6 million levy with roads the targeted recipient. The Council could agree neither on the amount or what it would be used for.

Carver also mentioned "bad press" as throwing a wrench in the effort.

Anderson pointed out that while property owners in Kingman don't pay a primary property tax, they do pay a property tax to the county and the school district.

"Why not have the police department not work on Wednesday and have the sheriff's office do it (law enforcement), because we're paying the county a property tax?"

Anderson also noted "a lot of out-of-town property owners have multiple lots" they don't pay taxes on.

The mayor offended a couple of people in the audience regarding the tax a $3 million levy would impose on the owner of a $100,000 home - about $14 a month. It was mentioned the owners of more valuable homes would pay more taxes.

"Somebody mentioned the $200,000 and $300,000 homeowners," said Anderson. "I couldn't care less about that person. I care about the $80,000 person."

Anderson explained his remark after the meeting, saying he cares about all residents. His point was that the owner of a less valuable property would likely struggle more financially to pay their tax.

Councilman Ken Dean seemed to speak for everyone when he said it just isn't a good time. "We do need financial stability, but the timing is bad. We've got this embezzlement, the economy is still bad, citizens don't have confidence in us, and we don't have a plan."

So what's ahead?

The half-cent sales tax increase is likely here to stay, and while the Council could always raise it even more, there will come a point of diminishing returns. There will come a time when people will go elsewhere to do their shopping - or shop online. The reliance on travelers to pay for the services the city provides could also impact the bottom line, which has been a moving target for the city for the past several years.

A tax on food is another possibility, although one the Council seems to want to avoid at all costs.

Another possibility could be a penny or two excise tax on fuel purchases, which Coconino County did and made a deal with the city of Flagstaff, which gets a cut of that revenue. City Attorney Carl Cooper made it clear the city would have to work with the county, as the supervisors can pursue the excise tax, but councils cannot. This too, must be approved by voters.