Mesa leaders are divided over imposing a city property tax — an idea floated last week by the head of a local police union to help pay firefighter and police officer salaries.
The idea appears to be gaining momentum at City Hall and in the private sector, given Mesa’s bleak financial picture. But City Manager Mike Hutchinson said there are no plans to impose a property tax, something that requires voter endorsement. Mesa hasn’t had a property tax since World War II.
City officials, facing a projected $31 million deficit for fiscal year 2003-04, are considering slashing up to 400 city jobs and reducing services, including some cuts in public safety.
"Probably every cop and fireman in the city would like to see a property tax," said City Councilman Mike Whalen, a retired assistant police chief. "They realize the instability of our other revenue streams."
Police and firefighter groups are lobbying "pretty heavy" for a property tax, Whalen said, adding he hasn’t formed an opinion yet, but the idea should be studied.
Vice Mayor Dennis Kavanaugh said he has supported a property tax for several years. It is a more stable source of revenue than sales tax, and individuals can deduct it from state and federal income taxes, he said.
"It’s a question Mesa voters have to look at in terms of the long-term economic health of the community," Kavanaugh said. "I think you need to have a variety of revenue sources in your portfolio."
Mayor Keno Hawker said his problem with a property tax is the government can seize property if people don’t pay it. There is no reason to believe Mesa’s existing revenue streams are inadequate, Hawker said. Still, a property tax could be part of a proposed 25-year financial model, Hawker said.
"Whether that would include a property tax is way too early to determine," Hawker said.
Councilwoman Janie Thom is staunchly opposed. She led an initiative in 2000 to change the city charter so that any property tax must be authorized by voters, not the City Council.
"I don’t think we need another source of revenue," Thom said. "I would be interested in seeing how we can reduce the spending the city is doing."
Mesa has long touted its lack of a property tax as an incentive for luring businesses. It’s a dubious claim, according to the leader of a local business organization.
"As for being an attraction for business development, I frankly haven’t seen that," said Charlie Deaton, president and CEO of the Mesa Chamber of Commerce. The organization has not taken a position, Deaton said.
A primary and secondary city property tax would raise about $30 million a year for city coffers, said Larry Woolf, Mesa’s finance director. Primary property taxes are used to finance city operations, and secondary property taxes are used to pay off bonds, he said.
Last week, Bill Everson, president of the Mesa Fraternal Order of Police Lodge 9, urged city officials to impose a primary and secondary property tax. Everson said his 800-member organization wants the city to impose a property tax because Mesa’s main sources of income — state-shared revenue, a sales tax and utility fees — aren’t as reliable.