Voters raise Prescott sales tax

Prop. 443 passes by 8 percentage points

Supporters of Prop. 443 celebrate their victory in the City of Prescott primary election on Tuesday, Aug. 29 at the Palace Restaurant and Saloon in Prescott.

Photo by Les Stukenberg.

Supporters of Prop. 443 celebrate their victory in the City of Prescott primary election on Tuesday, Aug. 29 at the Palace Restaurant and Saloon in Prescott.

Two years after Prescott voters overwhelmingly rejected a 0.55-percent pension-related sales tax, they turned around this year and approved a 0.75-percent sales tax for the same purpose.

The difference, say supporters: Grassroots support, and a hard-fought campaign.

“We told a compelling story, and we worked it really hard,” City Councilman Steve Sischka said Tuesday night, Aug. 29, from The Palace Restaurant and Saloon, where Proposition 443 supporters gathered to hear the city primary results.

Sischka and others involved with the “Stand for Prescott – Yes on 443” say they each attended 40 to 50 events during the campaign season in an effort to explain the need for the sales tax increase.

City Councilwoman Billie Orr, a fellow 443 supporter, said the revenue from the sales tax is crucial for the city’s future. “Tonight was a pivotal night,” she said.

Proposition 443 ended up winning by a 54- to 46-percent margin — giving the city the authority to raise the municipal sales tax by 0.75 percent to help pay down Prescott’s more than $78 million in unfunded liability with the Public Safety Personnel Retirement System (PSPRS).

The win for Proposition 443 comes just two years after voters rejected a 0.55-percent PSPRS sales tax-increase measure in 2015 by a 56- to 44-percent margin.

Cecelia Jernegan, co-chairman of the pro-Proposition 443 effort, said the committee’s efforts made the difference. “This committee was so focused, and I think you learn from your mistakes,” she said.

Co-chair Sherrie Hanna noted that the group used social media extensively “to spread the truth” in the face of misinformation.

And Linda Nichols, secretary of the committee, added that bipartisanship also was crucial to the effort. “We put so much more into it this time,” she said. “We did it all the right way.”

Malcolm Barrett Jr., a former City Councilman, expressed little surprise that with Proposition 443’s win. “Frankly, I’m surprised it didn’t pass by a larger margin,” Barrett said. “It was the commonsense approach.”

Just down the street at Far From Folsom, members of the “No on Prop. 443” committee expressed some disappointment at the results, but said they intended to stay focused on solving the issues with the pension system.

“I think we still have a lot of work to do,” said Chris Kuknyo, a former City Councilman, and vocal member of the No on 443 effort. “I hope the city leadership will start working with the state legislators (to fix the system).”

Mayor Harry Oberg, who has voiced support for borrowing from the city’s enterprise funds — such as water, sewer, solid waste — as an alternative for paying down the PSPRS debt, said he still sees that as an option.

“Since we have a dedicated funding source now, I think we should look at the enterprise funds to make a significant down-payment,” Oberg said.

The sales tax increase, which will run for 10 years or until the debt is nearly paid off (within $1.5 million), is expected to pump as much as $11 million per year into paying down the PSPRS debt. The 0.75-percent tax will take effect on Jan. 1, 2018.

City Manager Michael Lamar expressed gratitude to Prescott voters “for having enough faith in us” to pass Proposition 443. With approval of the tax, he expects the City Council to consider whether to make a one-time payment of as much as $11 million from its reserves to help bring the unfunded liability down. The matter likely will go to the council in the next six months or so, Lamar said.

Along with Proposition 443, Prescott voters also approved Proposition 442, the extension of the Home Rule Option. That proposition passed by a 66- to 34-percent margin.

A total of 16,432 voters cast ballots in the primary, for a response rate of about 56.4 percent — the same percentage of voters who participated in the 2015 primary.