For a county sales tax to be enacted, the measure would need to clear a high bar: a unanimous vote from a Board of Supervisors that doesnβt often vote unanimously on contentious issues.
Nevertheless, County Administrator Chuck Huckelberry is asking the supervisors to consider such a tax for the 2019 fiscal year β not the coming tax year β but only after months of public meetings and outreach, according to a memo released this week.
On Tuesday, the supervisors will decide what direction, if any, to give staff on pursuing a half-cent county sales tax. Pima County currently does not levy its own sales tax.
The board will not be voting on approving the tax itself, a decision that would not come until 2018 if supervisors decide to move forward with the idea.
The proposal comes after the board approved a tentative budget with a 14-cent property-tax increase to accommodate a new 25-cent primary property tax that would go exclusively to funding the repair and preservation of local roads.
After previously expressing reluctant support for the measure, Supervisors Ally Miller and Steve Christy voted against the budget measure.
After voting against the property tax for roads, Miller told her fellow supervisors that she was βnegotiableβ on a possible sales tax. She did not return a call for comment on the sales-tax proposal.
The sales tax, whose estimated annual proceeds would be just shy of $70 million, would be used to cover road repairs and reduce the countyβs property tax rate, which is among the highest in the state.
Assuming the sales-tax revenues would replace just the $19.5 million the property tax for roads is estimated to generate, the primary property taxes could be reduced roughly 21 percent to $3.57 for every $100 of taxable value.
For a residential property worth $132,000, which is the median price for a home in the county, a property owner would pay around $85 less in county property taxes compared with the current tax year. The sales tax would cost a family with an annual income of $47,000, the median for the area, nearly $78 per year, according to county estimates.
The sales-tax rate for unincorporated parts of the county is 6.1 percent, which includes the half-cent tax levied for the 20-year Regional Transportation Authority plan. There is no county-levied sales tax in place, unlike every other county in Arizona, according to the memo.
After Tucson voters recently approved a half-cent sales-tax increase by wide margins, the city now has a tax rate of 8.6 percent.
Supervisor Sharon Bronson said that a sales tax would help βdiversify our revenue stream,β which is largely dependent on property-tax proceeds.
However, three supervisors, including Bronson, raised issues with the regressive nature of a sales tax. A regressive tax is one that affects poorer taxpayers more heavily than wealthier taxpayers.
βIβm still concerned about the regressive nature of sales taxes,β Supervisor Richard ElΓas said.
He said many District 5 residents would be among those impacted most heavily by a sales tax.
As proposed by Huckelberry, a citizensβ advisory committee would be tasked with evaluating a sales tax and holding at least 12 public meetings to gather input from county residents before making a recommendation by March 2018.
Huckelberry also said there are measures that could lessen the sting of a sales tax for lower-income residents.
An attachment included with the memo shows that if the sales-tax revenues are used for just $19.5 million in road repairs β the estimated proceeds of the 25-cent road property tax up for a vote on Tuesday β and the remainder is used for property-tax reductions, then the additional sales-tax expenses for lower-income families is nearly washed out by property-tax savings. If more is used on roads, those property-tax savings are reduced.
Huckelberry also suggested that local road projects could be prioritized in poorer areas in recognition of the disproportionate impact of sales taxes. ElΓas described that proposal as βan important start, but I donβt think it relieves all the concerns I share about having a sales tax.β
While not opposed to a countywide sales tax in itself, Christy said it would be more sensible to add a half-cent onto the existing Regional Transportation Authority sales tax and use the proceeds for road repairs.
That approach would require an OK from the Legislature and then approval by county voters.
