Tempe voters will decide May 18 whether to approve a .2 percent sales tax increase for the next four years.
Proposition 401, if approved, would raise the current city sales tax rate from 1.8 percent to 2 percent, starting July 1. The tax would not include food purchased for home consumption.
The increased tax is estimated to raise $8 million for the upcoming fiscal year, and would go toward public safety staffing and city services.
Supporters say the council has already reduced the budget and this is needed as a temporary increase to help the projected $33.7 million deficit for the upcoming fiscal year.
Opponents say taxpayers shouldn’t have to bear the brunt of the city’s budget shortfall.
Former Tempe Mayor Neil Giuliano, who now chairs the Tempe First political action committee, said the tax addresses a “critical need at this time.”
“I think Tempe voters pay very close attention to local government activities and I know that the mayor and council have already greatly reduced city services,” said Giuliano, a Tempe resident since 1974 who was mayor from 1994 to 2004. “For most Tempe voters this is a no-brainer. It makes a lot of sense and is a very responsible action in light of the economic times that we live in.”
The tax will be an extra two cents for every $10.
Residents can go online to see the pages of cuts the city has already identified, including eliminating positions, reducing department budgets and increasing fees. Firefighters and police officers are also voluntarily taking a 2 percent pay cut for the next fiscal year.
Mayor Hugh Hallman said the city council has worked “as diligently as any community ever has to cut fat out of the budget.” Although the council voted unanimously to ask voters to approve the tax increase, Hallman unsuccessfully lobbied for the tax to last for only two years.
If the tax isn’t approved, cuts will have to be made in police, city courts, public works and community service departments.
According to a Tempe First statement, “The additional revenue to the community will ensure critical funding for Tempe’s police department, gang squad, fire fighters, courts, libraries and parks; not to mention funding for youth sports, senior and community programs. These are all critical factors in attracting high wage business and new jobs to Tempe.”
Tom Jenney, the Arizona director of Americans for Prosperity, opposes the tax. His group is a grassroots organization that promotes limited government and free markets.
“This tax is going to raise the equivalent of 2 percent of the city’s total budget, and taxpayers have to be wondering couldn’t they (the council) cut another 2 percent?” said Jenney, a Phoenix resident.
For more information on Tempe’s effort to balance the 2010-11 General Fund budget, visit www.tempe.gov/budgetplan.