Wed, May 22

Editorial: City’s sales tax debate becomes theater of unexpected

Cottonwood City Hall became the theater of the unexpected this past week.

People were showing up to City Council meetings begging that their taxes be raised. They were waving signs and actually cheerleading the idea of an increase in the city’s sales tax levy.

That means one of two things:

  • They astutely follow the workings of their local government and have a keen understanding of the fiscal challenges confronting Cottonwood City Hall.

  • Or, they’ve been played, manipulated, convinced to put on a show to ease the political anxiety naturally associated with a tax hike.

Bet on the latter.

As for the person pulling the strings for this little show, only time will tell whether it plays out as an effective political tactic.

The answer could come as early as Tuesday when the City Council is expected to vote on a bump in the city’s current 3-percent sales tax levy.

Even with this show of support during the past week, it’s only natural that council members and the mayor are apprehensive about the decision confronting them.

The major debate with any tax increase, be it on your property or as a surcharge to the purchases you make, is whether it should be decided directly by council or if it should go to a vote of the people.

In recent years in Camp Verde, we’ve seen both approaches used. In the November 2010 election, Camp Verde voters shot down propositions to raise the sales tax by 1 percent, and an accompanying measure to add an additional .05 percent for a new library.

Despite voter sentiment, the Town Council moved forward with its plans for a new library as well as increasing the basic sales tax levy.

The library now, ironically, is a source of undisputed pride in the community. But the council decision to bump the general sales tax prompted a recall effort in Camp Verde. It was of no consequence.

Likewise, one of the most vicious political cycles in Cottonwood’s history occurred when the council voted to do away with a municipal property tax in favor of a sales tax some 40 years ago.

Such history can’t help but cross the minds of council members as they contemplate their decision on a sales tax hike Tuesday.

Also, let’s not forget that this is an election year. Any vote now on a hike in the sales tax will follow, perhaps even haunt, incumbents seeking another term on the council now through November. Voters have long memories when it comes to the pocketbook implications of the decisions made by their local representatives.

Another consideration for council this week involves the city’s sales tax on food. It has been suggested to council that if the city opts to bump the general sales tax by anywhere from .05 percent to a full penny on the dollar, that they exempt groceries from the tax. It’s not an original thought, by any means. Camp Verde does not levy a sales tax on food items. And in Cottonwood, the very issue of having a sales tax on food has been challenged before via referendum.

Also to be considered by council is how a bump in the sales tax will cripple an already inflated rental market. Affordable housing consistently has been voiced as the No. 1 problem in Cottonwood, and throughout the Verde Valley. Cottonwood currently levies its full 3-percent transaction tax on rental income. A vote to hike the general sales tax is a vote to make an already problematic rental market even more burdensome for those seeking affordable housing.

There’s obviously much to think about before Tuesday’s expected vote on the sales tax.

Stay tuned.

It’s the theater of the unexpected