Editorial: Bill would hold cities where state wants them
From time to time we hear about the impact of sales taxes in the Prescott area. For instance, from the city's investment to get Trader Joe's to come to Prescott, not only did the city get its $2 million back (development costs) plus interest, they also now get sales tax revenue from business the market conducts.
But let's go further. Depending on what you buy - a DVD, book, bike or whatnot from a business in the city - part of the 8.35 percent sales tax you pay goes directly to the City of Prescott (2 percent), and part of the portion that goes to the state (5.6 percent) actually comes back to the city from the state in the form of state shared revenues.
And, while there are four kinds of state shared revenues - parts of sales tax, income tax, Highway User Revenue Fund money, and vehicle license taxes - all of that will remain in the shell game, unless the city adopts regulations or ordinances that conflict with state law.
That is, if Senate President Andy Biggs has his say.
Cities and towns across Arizona have been targeted by Biggs' proposed legislation (Senate Bill 1487) that would cut off their state shared revenue if they pass regulations that conflict with state law.
For the City of Prescott, to lose state shared revenues that would be more than 30 percent of the city's general fund - or about $11 million, said Alison Zelms, deputy city manager. In the streets budget, it would be about $3 million of HURF money.
While Zelms said "it's a big question mark constantly," and she called it pre-emption of local authority, she added that the City Council does not have anything currently on the books that would risk losing the money.
The topics though have been in state headlines in recent weeks and months, she said, such as outlawing plastic shopping bags or raising the minimum wage. Those issues have been or are being tested elsewhere in the state.
Are we in trouble? "I don't think so, but that's the concern," said Zelms, who explained that members of the Legislature who would have to complain and then the state Attorney General would decide.
"It's only as good as the person who raises the question. ... (and) that's not due process."
The bill would penalize cities and towns after an investigation. They would have 30 days to rescind the action or lose their state revenue. For the bigger picture: The state sent $600 million to cities and towns last year, according to the Associated Press.
Biggs was unavailable for comment Tuesday, but told the AP the Legislature is frustrated.
It reminds me of the blackmailing that happened decades ago when the federal government wanted states to raise the legal drinking age to 21, or lose highway money.
For Prescott, think about it this way: one person complains, the AG investigates and rules, and 40,000 people lose services.
Why would that be the case? City services, such as fire, police, and so much more are paid for out of the general fund.
Call it legal blackmail.
- Tim Wiederaenders, city editor
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