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Prescott Struggling with Prop 443

For some, the biggest issue on the upcoming primary and special election Aug. 29 may not be who gets elected to the Prescott Ctiy Council as mayor and city council members.
Rather, it may be the fate of Prop 443, which asks voters to approve three-fourths of a cent sales tax to be used to pay down the unfunded liability of an estimated $78.4 million the City of Prescott owes to the Public Safety Personnel Retirement System (PSPRS).
The official language of Proposition 443 says this: Shall the City of Prescott adopt a transaction privilege tax of three-quarters of one percent (0.75%), the revenue from which shall be dedicated to the payment of the City’s unfunded liability to the Public Safety Personnel System, taking effect January 1, 2018, and ending the earlier of December 31, 2027, or at such time as the City’s PSRRS unfunded liability is at $1.5 million or less as determined by actuarial value.
Local groups and organizations have already had several public meetings to discuss the pros and cons of Prop 443. Beyond that, an informational publicity pamphlet with arguments from opposing sides has been assembled. City officials say it will be distributed in late July.
The pamphlet has 27 statements. Of those 21 are for the sales tax increase, and only six oppose it.
Among advocates supporting the tax increase is a group called Stand for Prescott. Among its statements supporting Prop 443 are these:
• The city is responsible for paying the unfunded portion of the liability. The payments cannot be avoided.
• Funds used to pay that debt currently are taken from other city funds. That negatively impacts the General Fund and affects funding of other city services such as the fire and police departments, the library and parks and recreation facilities and services.
• Prescott has no other legal means by which to pay the debt. Bankruptcy is not an option.
• Even with three-fourths of a cent sales tax increase, the city sales tax will still be lower than neighboring towns.
• Despite repeated requests for assistance from the State of Arizona and the Arizona Legislature, none has occurred and none is likely to. The courts have rebuffed such efforts.
• The entire amount of the 0.075 cent tax collected will be dedicated uniquely to paying the unfunded liability. It cannot be used for other city expenses.
• The sales tax will sunset in 10 years, or when the unfunded liability is $1.5 million or less, whichever occurs first.
• The tax is not restricted just to city residents. Tourists, visitors – anyone who purchase goods in Prescott – will pay the tax.
Two current Prescott City Council members – Steve Sischka and Billie Orr – have been outspoken advocates for Prop 443. Speaking at a recent public forum of the Prescott Area Hospitality Association, Sischka said that if the sales tax did not pass, the city would have to make deep reductions in funding of city services like police and fire protection.
“We can’t keep kicking the can down the road,” he said. “That won’t make it any better. If it takes another 20 years, it will cost at least another $60 million, and we just don’t have that kind of money.”
Orr agreed, saying, “We have to face up to that debt right now. No one else is going to do it for us. It’s up to our community.”
A group opposing Prop 443 calls itself “Committee – No On Prop 443.” Among statements it distributes are these:
• Doesn’t fix Arizona’s failing PSPRS system – third worst in the nation;
• People on fixed income and low income are hit hardest;
• Gives City Council a blank check for additional millions in spending;
• Demands politicians create a real fix for PSPRS and protect retirees.
• Next year, expect more taxes.
Local activists John Lamerson and John Stevens oppose Prop 443. Lamerson said PSPRS has serious problems that need to be addressed by state officials. Stevens said he and other Prop 443 opponents had no solutions, but believe that the Arizona State Legislature needs to find a way to solve the unfunded liability. “I don’t think it can be done locally,” he said.
During the same meeting, Noel Campbell, one of two members of the Arizona House of Representatives from District 1, responded to a question from the audience about what role the legislature would take in the issue.
“I hate to tell you this, but believe me, no one at the legislature is going to touch this issue for years,” said Campbell. “The PSPRS board is controlled by the unions. The PSPRS is a hot button, one of the biggest crises the state and several of its communities faces. I really don’t think the legislature is aware of the tsunami coming. But I’ll do my part to create awareness during our next legislative session. But in the meantime, the reality is, Prescott needs to work on the problem. No one else is going to.”
More community and neighborhood meetings are being scheduled throughout July and early August to give voters the opportunity to gather information. Times, dates and locations for such meetings are announced through local media.
Only registered voters in the City of Prescott can vote during this election. Voters must be registered by July 31. Officially, the election will be Aug. 29; however, mail-in ballots will be distributed the week of Aug. 7, and voters can complete and submit them any time thereafter. QCBN

#1 Prescott City Council members Steve Sischka and Billie Orr shared their views about supporting Prop 443 during a recent public forum of the Prescott Area Hospitality Association. (Photo by Ray Newton)
#2 Prescott City Council member Steve Sischka and Arizona House Representative Noel Campbell, District 1, shared their views about the need to be informed about Prop 443 during a recent public forum of the Prescott Area Hospitality Association. (Photo by Ray Newton)

#3 Prescott advocates for Prop 443 (l to r) Julie O’Day, Susan Cohen and Linda Nichols joined Prescott City Council member Billie Orr during a recent presentation about the proposal at a recent Prescott Area Hospitality Association public forum.

By Ray Newton, QCBN
(Photo by Ray Newton)

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4 Responses to Prescott Struggling with Prop 443

  1. Escaped from high taxes July 9, 2017 at 12:31 pm #

    Problem is that taxes NEVER sunset.
    Make it a Building permit fee, Development fee.
    Money will accrue much faster.

  2. shenar ekla July 28, 2017 at 10:54 pm #

    Here, here! Time to shift the tax burden off the beleaguered populace who have been loosing money for years and back to those making the money. The burden of public funding used to be much fairer. It needs to be that way again. Voting No on Prop 443 will force government to look for sources of funding that used to be relied upon. The pendulum swings, folks. Time for it to swing back in favor of those who have been scapegoated for too long. You can’t get blood from a body that needs a transfusion.

  3. BOB OSO August 4, 2017 at 12:59 pm #

    What about the TENS OF MILLIONS OF DOLLARS THAT THE CITY OF PRESCOTT’S HOLDING FOR LIBRARY RESERVES?

    WHY DOESN’T PRESCOTT USE THESE RESERVE MONIES?

    MARICOPA COUNTY DOESN’T EVEN HAVE THAT MUCH IN RESERVE

    PRESCOTT MAKE MISTAKE THAT CAUSED THE DEBT. THEY NEED TO USE THESE RESERVE MONIES TO FIX IT

    BTW, WHO USES A OPEN-7-DAY-A-WEEK LIBRARY WHEN THEY HAVE THE INTERNET?

  4. Henry Hoyt August 10, 2017 at 11:07 am #

    If City has made commitments exceeding its resources, how is adding more money going to restrain further expansion? Saying that General Fund money can’t be used for anything else is false. Elected officials will just push any other monies used to currently to meet PSPRS commitments to exclusively sourcing from sales tax revenue. This liberates money to spend on buying yet another constituency. Taking away citizen visible services while freeing up money for special interests is the oldest masquerade in public administration. The sales tax will then never sunset. The only result will be to build into the continuing operations (vs capital) budgets with the increase.

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