Monday, April 13, 2015

Oro Valley Mayor Hiremath's "33% Solution"

Last September, we met with Mayor Hiremath to discuss a community center for Oro Valley. LOVE has advocated for a community center for many years. The Mayor said, during the last month of his campaign that he was in favor of the town having a community center. We were thrilled. Finally, some common ground on which we could build.

 At our meeting with the Mayor, he said that, in order to finance the community center, Oro Valley would have to raise the sales tax a half penny. He also said that "33% of Oro Valley sales tax revenues come from people who do not reside in Oro Valley."  The Mayor thought that, by raising the sales tax a half-penny, a larger share of the sales a tax dollars would come from these people. They would, in effect, pay for the community center.

(At that time we had no idea that the Mayor was talking about purchasing the El Conquistador Country Club and converting the club house to a community center. Had we known it at that time, we would have told you.)

Our conversation with Mayor Hiremath was not about the "33%" number."  We never questioned it. We "assumed" [there is that word again] that Mayor Hiremath and the Town Of Oro Valley had a valid financial analysis that substantiated this fact. After all, the Mayor has asserted that sales tax revenue derived from tourism was way to fund the community center. This financing method would be of less burden to the residents of Oro Valley than any alternative financing method.

Oro Valley resident Paul Emmert was curious regarding the number. He asked Mayor Hiremath, via email, about the support for the number. According Mayor Hiremath, the number was calculated when he was president of the Southern Arizona Arts and Cultural Alliance ("SAACA). It was based on a methodology that he gave to Emmert. When Paul investigated further he found that neither the Mayor nor anyone Paul could contact in that town of affiliated with SAACA could find the actual calculation.

In his correspondence to Emmert, the Mayor recalls the SAACA study. As SAACA applied the methodology, " was apparent that a pattern was beginning to develop and that pattern was that, on average, we were looking at roughly 33% of revenues were coming from visitors."

Emmett would  like to see the calculation. The 33% number differs from a number from a study done by the Arizona Department of Tourism that shows that 10.4% of sales tax revenues comes from tourism.

Mayor Hiremath asserts in his email correspondence to Emmert that it is Emmert's job to prove the 33% number is wrong rather than him proving that the number is right. We thought his position on this a bit curious so we  did follow-up with the Mayor. He told us that methodologies provided by American For The Arts [which SAACA uses] and the Destination Marketing Association International [which TREO] would, when their results are combined, exceed the 33% number.
"If you combine the two percentages, you will see that they will be above the 33% and keep in mind that's not even including the daily sales tax [revenue] we receive from Catalina, Oracle, Marana, San Manuel, Tucson, and Pima County residents to name a few."

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