John's Place: The Perpetual Life Of The Oro Valley Utility Tax

The primary reason for the enactment of the Town Of Oro Valley 2006 utility tax was insufficient recurring general funds to support 18.5 new positions. The 18.5 new positions had been turned down twice in previous council budget votes because of lack of funds.

The original utility tax rate was proposed at 4%. The 2006 Council placated the taxpayers by reducing the tax rate from 4% to 2% and by adding a sunset clause “promise” to eliminate the utility tax in two years. Tax revenue was forecasted at $1.3 million per year.

There were some immediate unintended consequences from adding this utility tax! The Pima County taxpayers (including Oro Valley residents) pay for the Amphi School District budget. The Amphi School District budget then had to pay approximately $37,500 per year utility taxes to Oro Valley for its schools located in Oro Valley.

The utility tax was extended on March 4, 2009 for “more revenue” needs. So much for any “elimination promises” to taxpayers!

On May 4, 2011, by a 5-2 vote, the utility tax was doubled from 2% to 4% by the Majority-5 (Mayor Hiremath, Council Members Hornat, Waters Snider and appointed Council Member Solomon) of council. The stated reason was “to enhance the diversity and stability of town revenues and to provide needed resources to maintain town service levels."

Again, there were some additional unintended consequences from doubling this utility tax! The Pima County taxpayers (including Oro Valley residents) pay for the Amphi School District budget! The Amphi School District budget then had to pay approximately $75,000 per year utility taxes to Oro Valley for its schools located in Oro Valley.

Incidentally, in 2014, the utility tax still supports many of the 18.5 positions (13 in the police department alone) that were added in 2006.

It seems that, once elected officials get ahold of a funding source, they never let go. Even when they promise to let go.  The revenue source has a perpetual life!

Do you think that the Town of Oro Valley’s experience with their utility tax has been a sterling example for the taxpayers to ponder prior to voting in the Mayor and Council member election in August 2014?
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John Musolf retired to Oro Valley in 2003, moving here from Wisconsin. He has a B.S. in Economics/Accounting from University of Wisconsin and MBA in Computer Management from the University of Phoenix. He has taught Project Management at a number of Universities. He is a “Bucky Badger” and “Packer Cheesehead.” One of his married daughters went to college at University of Arizona and he and his wife visited her in Tucson frequently. John was a management consultant (accounting and computers) and traveled all 50 states as well as the world internationally. He was a political activist in Wisconsin and continued on in Oro Valley. He believes in traditional values. He is an old codger (1937) being a father, grandfather and great-grandfather. He will slow down when he becomes a great-great-grandfather. He has been married to his wife, Judy, for 54 years. His other interests include church activities and extensive reading and researching.
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