The Gilbert Town Council formally approved a quarter-cent sales tax increase Tuesday night, which was OK'd June 2 to help close a $14 million gap in the $114 million General Fund, which pays for most of the town's daily functions.
Two of the council's three new members, Mayor John Lewis and Councilwoman Jenn Daniels, opposed the tax hike, which is projected to raise about $7 million a year and will increase the town's sales tax rate to 1.75 percent. The increase is set to expire on May 31, 2012.
The council voted 6-1 on June 2 for the tax hike, but Tuesday gave the new members their chance to vote, and their votes followed their campaign positions.
Councilman John Sentz voted for the increase, saying that public safety response times would suffer without the extra revenue, and noted that the town is following other measures, such as taking $5 million from a fund set aside for replacing town vehicles.
"Some people said we can do without. Well, we are doing without. So I'm going to vote for quality of life and what I feel is best for the residents of Gilbert," he said.
Daniels and Lewis sided with most of the speakers in the public hearing, who opposed the increase. Daniels said the problems being faced now by the town would probably recur over the next two years as the economy continued to struggle and Gilbert felt the full impact of lower state income tax collections.
"We may be in the same position very soon where we come back saying we don't have the money to maintain the quality of life in Gilbert," she said.
She said not adopting the tax hike and cutting spending instead would also send a message of solidarity with struggling Gilbert families who are being laid off or seeing pay cuts.
Connie Taylor said she and her husband are getting by on 55 percent of the income they had two years ago and were making spending decisions accordingly.
"We don't take vacation any more. We don't buy clothing. My husband is 75 and I'm 69 and we do our own yard work," she said, as one of about half a dozen citizens against the tax increase.
The council also voted 7-0 Tuesday to remove an exemption in the town's rental tax rate for landlords who only rent out one residential unit. It's unclear how much money this change will raise for the budget. The overall $734 million budget was adopted by a 6-1 vote with Daniels opposing. The council also voted 5-2 in favor of adopting a 1 percent use tax, which is charged on items bought outside of town and used in Gilbert. Most Arizona cities and towns already charge such a tax. The largest item it applies to is the fuel used at the San Tan Generating Station, operated by Salt River Project in Gilbert.
Getting ready for what's expected to be further budget cuts to remedy what's likely to be a continuing revenue problem over the coming five years, the council began to set up a citizens committee to help pinpoint further budget reductions that can be made in the future. The panel is expected to consist of about 28 members, with council members Daniels, Sentz and Steve Urie sitting on a committee to lead the charge.
In other action, Councilwoman Linda Abbott was chosen vice mayor for the upcoming year on a 7-0 vote. The job of running the meetings in the mayor's absence and helping to keep track of agenda items is rotated among the council members annually.