Tuesday, May 4, 2021

Guest View: Mike Zinkin ~ Why cut taxes when you can reallocate the additional funds instead?


The above question should not surprise anybody
After all, don’t all governments find a way to spend tax dollars, even when there is no longer a need for the original subsidy?

The history of the increased sales tax to fund the Community Center and Golf Courses
On March 1, 2015 Oro Valley initiated an increase of our sales tax from 2% to 2.5% with the additional .5% to be dedicated to the Community Center Fund. The Town had purchased the HSL properties to include golf, tennis, swimming, and a community center. The Town knew that it needed additional revenues to cover this investment.

According to the ordinance (O) 14-17, “an additional revenue source is necessary to subsidize the operating costs and fund the capital needs of the facility over time.” The tax was forecasted to “generate approximately $1.6 - $2 million annually in additional revenues.”

Some more background for the new residents in town
Immediately after the Town Council motion to purchase the HSL property, a PAC called TOOTH (Tee’d Off Over Tax Hike) was formed to gather signatures to invalidate the Council decision. TOOTH was a play on words as the mayor at that time was a dentist. They needed 1,148 signatures to get the referendum on the ballot.

Despite having to collect the signatures over the Christmas holidays (from 12/18/14 to 1/16/15), TOOTH collected 3,158 signatures (more than twice the required amount) only to have the Town Clerk void the petitions due to a minor clerical error. With one day left to gather the required signatures, another PAC was quickly formed and gathered over 1,100 signatures in just 5 hours. This was just shy of the 1,148 they needed to force a ballot issue. As such, the residents never had an opportunity to vote on whether they agreed with the tax increase to fund the Community Center, thus the purchase and accompanying tax became a reality.

Two Choices
In the current budget (FY 2020/21) which ends on June 30th, the dedicated sales tax is now forecasted to provide $2,492,960. So what does our government (Town Council) propose to do? Instead of reducing the tax, they find another reason to spend the additional revenue. Looking ahead to next year, the Town Manager’s Recommended Budget for FY 2021/22 forecasts the sales tax revenue to be $2,857,779.

The increased tax imposed on the People was to subsidize the Community Center Fund. Now that the revenues are well above the initial $1.6 - $2 million specified in the ordinance, the Council has two choices: (1) reduce the tax or, (2) find reasons to spend the additional revenue. They have chosen the latter and I believe that doing so is fiscally irresponsible.

This tax has forced the entire community of 44,000 residents to subsidize fewer than 300 “golf members.” The tax was wrong to begin with and will continue to be wrong if it is no longer going to be spent as originally proposed.

More tax history: The Utility Tax that never went away
Oro Valley already pulled a similar stunt when they passed a temporary 2% Utility Tax in 2006 to fund 18.5 new staff positions, mostly in the police department. The tax was supposed to sunset in 2009, but in 2009 the Loomis council voted to extend it at the 2% level with no sunset clause. Then, in 2010, the Hiremath council increased it to 4% and we have never gotten rid of this “temporary” tax.

Oro Valley should only tax for what it needs and nothing else.

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Mike Zinkin and his wife have lived in Oro Valley since 1998. He served on the Oro Valley Development Review Board from 2005-2009, the Board of Adjustment from 2011-2012, and the Town Council from 2012-2016. He was named a Fellow for the National League of Cities. He was a member of the NLC Steering Committee for Community and Economic Development and a member of the Arizona League of Cities Budget and Economic Development Committee. He was an Air Traffic Controller for 30 years. Mike has a Bachelor’s degree in history and government from the University of Arizona and a Master’s degree in Social and Philosophical Foundations of Education from California State University, Northridge.