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Wickenburg's Tax Options

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.

The Letter

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

3 comments to Wickenburg's Tax Options

  • The problem with sales tax and Wickenburg is this: if we can’t buy the things we need here in town, we won’t. It doesn’t matter how high or low the tax rate is. There won’t be any sales tax revenue for sales that don’t happen.

    Other than food, I do 95% of my shopping outside of town. It’s not because I don’t want to support the community — I do. But if I can’t find the things I need here, what am I supposed to do? Go without?

    Wickenburg’s biggest problem is that the community lacks the jobs, goods, and services a financially viable community NEEDS to stay in the black. When you rely on a population composed primarily of retirees who don’t need jobs, are here only half the year, and have all the time in the world to leave town to do their shopping, how can you honestly expect to have a vibrant local economy? Or even expect local shopkeepers to stay in business?

    I’d like to point out here that I recently moved my business out of Wickenburg because the local economy simply couldn’t support it. Down in the Phoenix area, my operating costs are lower and my sales are higher. Could simple math like that be why Wickenburg can’t attract more than the fly-by-night businesses that can’t seem to last more than a year?

  • BigDaddyota

    We moved to the West and into Goodyear in 2007 coming form Germany and we were first amazed about all the fancy Plans that all this Towns had come up with ONLY based on Sales tax and Construction related tax income – wow,it pretty much seems to be wonderland here.

    Why I am so ‘blond’ about it, because none of this Towns has anything beside Farming – if still existing and protected – that produces anything else, o.k. some smaller businesses do but that doesn’t sustain a Towns capabilities or responsibility for servicing its Citizens.
    I a climate that is only dictated by ‘making as much as possible profit’ its even tougher for small Communities with none of such above mentioned source to survive or strive.

    What one should consider is to rethink what a Town like Wickenburg beside his respectable age and History makes it interesting for Visitors and Citizens – and thereby accepting that on the long term only the one or two night visitors will make the count.

    A lot of towns in Europe in a similar situation have gone down the river but other have survive by adapting to their capabilities and their strengths.
    So why is wickenburg accepting the rotting of their history at the former Vulture Goldmine, one of its main attractions which is a shame to see right now as the Ownership alone can not stand to save this attraction for the Town. What about the nice river area at the downstream south east of Downtown, why not making more and for visitors out of his area instead of seeing it rotting the style it is now?

    This are only a few examples, my Family and I always like to come to Wickenburg twice or more during the year but you certainly have more to offer for your best striving as now is developed.

    Or you stay as the retirement Town and keep your property taxes were the belong and lift them even higher for everybody that doesn’t make a living here for the whole year or is retired.

    This is not socialism – this is Market orientated capitalism with a lit bit touch of social thinking as to how can we as a worth it community survive and strive.

    I would love to see some development on this and i really can tell you – the Community is ALL what really counts because YOU live here!

  • John Cote

    i Maria

    I disagree with your comment. Wickenburg does not have to provide a market for every product to be a viable community. If the current government is having fiscal problems it is of their own making. The point of my article was that reliamce on the property tax is revenue neutral regardless of economic conditions – that is, values drop and tax rates increase but the property owner pays the same tax. When sales taxes drop the loss in revenue is real. Maybe this is why the relatively affluent town of Wickenburg is acting like chronically depressed communities and courting aa jail and a rail park on the wrong side of town (to the east NO traffic – to the west ALL traffic).

    When you knock the elderly second home owners and snowbirds you undermine the greatest strengths of this community. Wickenburg would not have survived without these components. If they leave you will be looking downtown Kingman straight in the face.

    I chose this town partly because of its three hardware stores (but no Home Depot) and its favorable ratio of really good local restaurants versus national chains. If I can’t find what I need here, I can buy it on the internet – so what’s the problem?