This is a letter to the editor of the Sun in a timely answer to a Cloe editorial on the same subject which was never published. Although the Sun denies receiving it and has offered to consider publishing it subject to their one month one article rule, my email records clearly show that it was received in the appropriate time frame. Printing it now would mute the desired effect anyway so I think another venue is needed.
Editor, Wickenburg Sun
Ok, I’m relatively new here moving from New England about 5 years ago and I don’t really understand municipal finance in AZ but it seems to me that a “TRADE” of a portion of the sales tax for a portion of the property tax is just that. Wickenburg property owners will not be getting any tax relief, in fact all their property taxes will now go to the state, county and a school district increasingly focused on developing a new school system in Buckeye. In return, the Town of Wickenburg will get to keep a larger percentage of sales tax revenue generated within its boundaries. So there’s no local property “tax break” only the comfort that Wickenburg property taxpayers might feel knowing that all of their LOCAL property taxes are now going to a good cause to make up for declining collections in Phoenix, Buckeye, Peoria, Surprise, Glendale and other struggling valley communities in these hard times.
Why is total reliance on the sales tax a bad idea? Simple! It pits town government against residents virtually guaranteeing that the town will approve every proposed project that will increase sales tax revenue regardless of whether it will damage the local property tax base or quality of life. Why? Because the town will have no vested interest in the local property tax base and – in fact – under this system, there is no local property tax base – it all belongs to the state and county and any other tax jurisdictions.
In a system where local property taxes are the first source of local revenue, places like Wickenburg are true tax havens. With an average age of nearly 50 and a high percentage of nonresident second home owners, the level of services per resident is extraordinarily low compared to the value of the property tax base. That is, if Arizona communities relied on their own real estate tax base for revenue, Wickenburg would have one of the lowest tax rates in the state. As is, we are already subsidizing the rest of Maricopa County, and with this latest deal we are giving away the rest of farm. And the timing couldn’t have been worse! Assessments in Maricopa County properties decreased on average by over 22% between FY 2009 and the upcoming FY 2010 but Wickenburg’s assessments decreased by only about 4%. So, if tax rates adjust so as to be revenue neutral, the typical valley community will see no tax increase but Wickenburg would see a double digit increase in property taxes!
Our leaders have been drugged by the apparent success of valley communities which is unraveling as I write. Drive east on SR 74 and you see a sign that says “Phoenix – 37 miles” and just 2 miles later you see a sign that says “Entering Phoenix” — or take a ruler to the latest county map showing community annexations and find that Buckeye now measures 46 miles north to south! Is this efficient municipal management or a time bomb based on a self destructive rooftops and retail arms race fueled by the lure of the almighty sales tax?
Anything we can do to keep more of our local property tax dollars within this community should be done. To force the issue, a voter mandate to eliminate local sales taxes might just start the fire that brings some fiscal sanity to Wickenburg and maybe even the rest of Arizona.
Last 5 posts by John Cote
- Concerns about the School Override Vote - November 6th, 2006