On Aug.15, the Kingman City Council voted on two issues that impacted what we now all pay in sales tax in Kingman. With a 6 to 1 vote Council kept a half percent tax that was due to sunset at the end of 2017. Then, in addition, by a 5 to 2 vote, they increased the city’s sales tax by an additional one percent. These taxes went into effect on Nov. 1. The night of the meeting and vote, Council said the half percent, not to be sunset, would be used as it had been, that is to help fund the City’s overall operations. Regarding the new one percent, the Council said half of it would be used for road preservation and the other half for capital projects. It should be noted that the spending designations made by the current Council do not obligate any future Council. Therefore, the uses of the monies are subject to reallocation or redirection upon the current or future Council voting to do so.
The Council agenda for the Aug. 15 meeting notified the public that the one half percent due to sunset, as well as a discussion about an additional amount for road preservation, would be discussed at the meeting. However, there was no notice that an increase to be used for capital projects would be discussed. Some Council members and some members of the public in attendance asked that the sales tax vote be tabled for at least one meeting in order to allow for more public comment as well as for appropriate notice to the public that capital project funding was being discussed. During the meeting, the lack of public notice was questioned and discussed by Council, City staff, as well as some of the public in attendance. Ultimately, those concerns were set aside as evidenced by the Council’s eventual motion and 5-2 vote for a full one percent increase, half of which did indeed get designated for capital projects.
No specific capital projects were identified the night of the meeting. There was some implication at the meeting that the term “capital projects” was a place holder for the I-40 interchanges at Kingman Crossing and Rancho Santa Fe. Some in attendance expressed concern that the approval of a sales tax increase should not be done until actual capital projects and estimated costs of those projects were identified.
Among the comments made by the public were many about the negative financial impact that a sales tax increase would have on Kingman businesses. Council heard many express a concern for the increased cost of doing business in Kingman, the competitive disadvantage with surrounding communities that an increase could put on business, and the additional impetus that this increase would give retail shoppers to shop the internet or in other communities, rather than shopping locally. In response to the idea that everyone can pay one percent more, some retailers pointed out the magnitude of a one percent increase on big ticket items. Even with the expression of those concerns, the Council voted to increase the sales tax.
The Kingman Chamber of Commerce, including the Board Chairman, the Chamber’s CEO, and prominent Chamber members were in attendance at the Aug. 15 meeting and participated in the expression of all of the concerns mentioned above. Since the August meeting and especially since the Nov. 1 implementation of the increases in sales tax, the Kingman Chamber Board has continued to hear concerns expressed by its membership.
To summarize, the Chamber Board has been hearing: 1) That the action to increase the tax was rushed through. 2) That there is uncertainty how future Councils may reallocate the use of the funds. 3) That there was a lack of proper public notice by Council. 4) That there was a perceived effort to limit public comment. 5) That there was little or no clarity on specific capital projects on the night the vote was taken. 6) That there was little consideration of the negative impact and the burden placed on the Business Community. 7) That Council didn’t want to hear from business or from Kingman citizens. 8) That an issue this big, with this much impact, that obligates resources for many years, to a capital project as big as the I-40 interchanges, should be voted on by the registered voters of Kingman.
To validate that a majority of the Kingman Area Chamber of Commerce members believed the sales tax increase should have been a ballot issue, from Oct. 27 through Nov. 23 the Kingman Area Chamber of Commerce conducted a poll of its membership. The primary question asked the following. “If there was a way for the sales tax issue to be brought back to the public for a vote, should that occur?”
The results to the question? 66.4 percent answered yes, 20.8 percent answered no, and 12.8 percent of the respondents needed more information or had no opinion.
The Kingman Area Chamber of Commerce and Chamber members want to see existing businesses and industries in Kingman grow and prosper. The Chamber wants to see new business, industry, and people move to the community. They see the I-40 interchanges as integral to growth and expansion. The Chamber of Commerce leadership and members know that new and sustained revenues are needed for progress to occur. The Chamber wants the community to have good roads and for City government to have the resources to serve the Kingman community. There is a recognition that Kingman relies heavily on sales tax as there are few other sources of revenues for city government to draw on. The Chamber recognizes that the tipping point of progress requires taking some risk and new thinking. It recognizes that everyone needs to work together to overcome obstacles and barriers.
It would be inaccurate for anyone to say that the Chamber’s regard for how its membership feels about the sales tax increases is a contradiction to wanting growth and prosperity for Kingman.
However, at this point and time, many businesses that sell their products and services in the Kingman community feel like the new sales tax is an unfair burden that was placed upon them in an inappropriate manner. They weren’t asked for input. No means to mitigate the impact to the larger retailers was discussed. The process used to increase the sales tax is felt to have been less than transparent. Some very experienced business people in the Kingman community are worried about the use of sales tax revenues as the primary source of long-term financing of a multi-million dollar project.